LOS ANGELES — Some Hawaii military housing bonds received a Moody's Investors Service upgrade ahead of a May sale.
Moody's upgraded March 15 the underlying rating on Island Palm Communities LLC Series 2015 Class II bonds to A2 from A3 and Series 2015 Class III bonds to Baa1 from Baa2. It affirmed the Class I bonds at Aa3. It assigns all three series a stable outlook.
The ratings upgrade came ahead of plans to sell $202 million in fixed rate trust certificates in two series of equal amounts on May 11.
The bonds are insured by National Public Finance Guarantee.
For the stable outlook, Moody's cited the expectation that coverage will remain strong despite the anticipated decline from the approaching principal amortization in fiscal 2016. The apartment communities have also maintained high occupancy levels, analysts said.
Island Palm Communities LLC., the borrower, is a for-profit limited liability company with two voting members, an affiliate of Lend Lease, the managing member, and the U.S. government represented by the Secretary of the United States Army. The developer, Lend Lease, is a majority-owned subsidiary of the Lend Lease Corporation - an Australian-domiciled international group with three core businesses: Bovis
Lend Lease, Integrated Property Development, and Real Estate Investment.
IPC has a leasehold interest in the federally-owned land and a fee interest in the housing projects. The term of the ground lease is 50 years with a 25 year extension option. Both the land and the improvements will revert to the Government at the end of the lease term.
