Fitch upgrades N.H. municipal bonds

Fitch Ratings has upgraded New Hampshire Municipal Bond Bank 2006 Series A bonds from AA to AA+, with an outlook on the $53 million worth of bonds as “positive.”

The bonds are scheduled to sell on June 22 through competitive bid. NHMBB will lend the 2006 A proceeds to 14 local governmental entities to be used for various capital improvements.

Fitch also upgraded the bond bank’s $47 million in outstanding 2005 General Bond Resolution Bonds from AA to AA+ and maintained its “positive” outlook rating.

Fitch said the rating upgrade reflects the development of NHMBB’s startup loan pool, which expanded to 15 borrowers from a single borrower a year ago. The positive rating reflects the global rating agency’s expectation that the pool of borrowers will continue to grow and diversify over the next few years, improving the credit quality of the bonds issued under the 2005 General Bond Resolution.

The 2005 bond resolution is structured similarly to a resolution created in 1978, but the 2005 plan updates certain standard provisions and authorizes the bond bank to use a surety or other credit mechanism to fund its required debt service reserve.

Fitch said the rating is “also based on the strong legal provisions which mirror those in the 1978 resolution, the high credit quality of the two largest borrowers — Bedford School District and Kearsarge Regional School District — and NHMBB’s successful development and management of existing loan pools.”

According to Fitch, most of New Hampshire’s eligible municipalities use the bond bank as their primary borrowing vehicle because it offers local government borrowers the lowest cost of capital. — CINDY KIBBE