CHICAGO -- Standard & Poor's Corp. upgraded nearly $800 million of Wisconsin Housing and Economic Development Authority debt last week to AA from A-plus in what the agency said was the first housing debt upgrade under criteria released late last month.

The upgrade of the authority's outstanding home ownership revenue bonds issued from 1988 to 1991 came on the heels of the AA the agency awarded last month to $100 million of home ownership bonds the authority priced on June 16.

Carole Pitcher, a director at Standard & Poor's, said yesterday the upgrade for the Wisconsin authority's debt was the only one since the agency published its new approach to rating state housing finance agency debt on June 29.

Under that approach, Ms. Pitcher said, the agency is giving housing authorities "more credit for their management and for their portfolio's performance."

Wisconsin's home ownership debt upgrade was based on the strength of the authority's investment portfolio and the indenture's cash flows, as well as the "continuing strong performance" of the mortgages and the authority's management, according to a report on the upgrade.

Standard & Poor's credited the authority's track record in keeping mortgage delinquencies below the Mortgage Banker's Association average for the state, allowing mortgage cash-flow assumptions to be reduced to 30 days from 60 days.

Richard J. Longabaugh, executive director of the Wisconsin authority, said the upgrade gives the authority double-A ratings for its outstanding single-family housing debt from both Standard & Poor's and Moody's Investors Service.

He commended Standard & Poor's for its new approach to rating housing debt, saying that avenue "does a better job of giving investors insight into what's happening in a particular state or with a particular agency beyond a particular bond issue."

The new criteria of Standard & Poor's also takes a blended rating approach for providers of credit support for housing issues.

Under this method, ratings are based on "the quality of the entire pool of assets, not on the rating of the lowest-rated provider," according to the published report on the approach. The report says this change reflects the agency's recognition "of the additional enhancement some state [housing agencies] bring to their rated debt through proactive portfolio management and financial resources."

Ms. Pitcher said that more ratings upgrades would "probably" follow Wisconsin's "as issuers issue new debt or as we do our annual reviews."

About $1 billion of state housing debt, issued by the Utah Housing Finance Agency, New York State Housing Finance Agency, New York State Medical Care Facility Finance Agency, and New Mexico Mortgage Finance Authority, was placed on CreditWatch with positive implications last month for an assessment of overall credit quality under the new rating criteria. The agency reported that the 20 issues were previously downgraded due to downgrades of financial institutions that provided investment agreements or letters of credit for the issues.

Another $10 billion of housing debt that was placed on CreditWatch with negative implications last October due to downgrading of Citicorp and Citibank will also be examined under the new approach, according to the agency.

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