Fitch Affirms NYHDC Multi-Family Mortgage Revenue Bonds (BAMLL 2014-8SPR)
The New York City Housing Development Corporation multi-family mortgage revenue bonds (8 Spruce Street), series 2014 represent the beneficial interests in the mortgage loan securing the fee interest in and associated rents from New York by Gehry located at 8 Spruce Street, New York, NY. Collateral for the loan includes the residential component located on floors 7 - 76 inclusive of 899-units; the multi-family amenities located on floors 6 - 8; and a small retail location on the ground floor. The property was completed in 2011 and designed by architect Frank Gehry.
KEY RATING DRIVERS
The affirmations are based on overall stable performance since issuance. Based on trailing six months June 2015 financial statements, the Fitch annualized net cash flow has remained stable at $36.1 compared with $36.4 at issuance. A rent roll from the same period shows occupancy also stable from issuance at 99%.
The issuance includes $346.1 million of taxable bonds (classes A, B, and C) and $203.9 million of tax exempt bonds (classes D, E, and F). The property is subject to a regulatory agreement with the issuer, New York City Housing Development Corp., requiring, among other things, the property to preserve the tax-exempt status of the bonds, preservation of the 421-a real estate tax abatement and that all units continue to be subject to the New York City Rent Stabilization Law.
The loan was originated by the New York City Housing Development Corporation and underwritten by Merrill Lynch, Pierce, Fenner & Smith Inc. (Bank of America Merrill Lynch), Barclays and Citigroup.
RATING SENSITIVITIES
The Stable Rating Outlooks indicate that rating changes are unlikely over the next one to two years. Should occupancy or portfolio cash flow deteriorate materially, downgrades are possible.
DUE DILIGENCE USAGE
No third party due diligence was provided or reviewed in relation to this rating action.
Fitch has affirmed the following classes:
--$276.9 million class A at 'AAAsf'; Outlook Stable.
Fitch does not rate classes B, C, D, E, and F.
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