S&P cuts Pa. housing agency's credit rating
PAFA at AA-, down from AA
The Standard and Poor's credit rating agency has cut the Pennsylvania Housing Finance Agency (PAFA)'s credit rating to AA- from AA, citing the agency's low profits and increased loan losses comapred to other mortgage finance agencies. The agency is run by a 14-member board, including 6 appointed by Gov. Corbett.
"The agency's profitaiblity and leverage ratio remain below those of its AA-related peers," wrote S&P anaylst Stephanie J. Morgan in a report to clients. Net gains on PAFA's portfolio fell to $29.5 million in the 12 months ended june 30, from $42 million in the previous year. Assets fell 8% to $5.4 billion during that period. Loans delinquent by two months or more rose to $200 million, from $144 million a year earlier. S&P expects
Morgan added that PAFA faces a challenging future home loan climate, given the continued "bottom tier" ranking of Pennsylvania's economy compared to other states.