21.11.2012 21:20
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New Hampshire Municipal Bond Bank-78 Resol. -- Moody's assigns Aa3 rating to the New Hampshire Municipal Bond Bank's $8.7 million 2012 Series D bonds; outlook is stable

Aa3 rating applies to $696.8 million of debt outstanding under the 1978 resolution

New York, November 21, 2012 -- Moody's Rating

Issue: 2012 Series D Bonds; Rating: Aa3; Sale Amount: $8,700,000; Expected Sale Date: 11-29-2012; Rating Description: General Obligation

Opinion

Moody's Investors Service has assigned a Aa3 rating to the New Hampshire Municipal Bond Bank's$8.7 million 2012 Series D Bonds. The outlook for the bond bank's 1978 resolution is stable. The Aa3 rating applies to $696.8 million of outstanding parity debt issued under the bond bank's 1978 resolution, including the current issue. Proceeds of the bonds will fund loans to New Hampshire local governments for the purpose of refunding US Department of Agriculture (USDA) loans the municipalities had incurred previously, as well as to deposit additional moneys into the debt service reserve fund (DSRF) securing the 1978 resolution bonds.

The bond bank also has bonds issued under two other resolutions. Under the 1979 State Guaranteed Municipal Bond Issue Resolution, the bond bank currently has $3.7 million of bonds outstanding, which carry a Aa1 rating and stable outlook, equivalent to the state's GO rating. Under the 2005 General Resolution, the most recent resolution, the bank currently has $231.2 million of bonds outstanding, rated A1 with a stable outlook.

SUMMARY RATINGS RATIONALE

The Aa3 rating reflects the application of our methodology for pool program debt. The methodology's key rating factors and weights assigned to each factor are as follows; underlying credit quality and default tolerance (50%); pool size and diversity (15%); debt structure and legal covenants (20%); and management and governance (15%). The methodology states that for pool program structures that include a moral obligation pledge of their respective states to replenish a draw on the debt service reserve fund (DSRF) in the event of a loan repayment deficiency, we will compare the credit quality of moral obligation pledge to the underlying pool program rating and apply the higher of the two. In this case, we have determined the credit quality of the moral obligation pledge to be higher than the pool program rating assigned through the application of the U.S. Municipal Pool Program Debt methodology. It is two notches below the state's general obligation bond rating of Aa1 with a stable outlook.

Also factored into our assessment of the rating is the long and successful operating history of the bond bank (since 1977), which has pledged its general obligation; active oversight of loan repayments; the medium-grade credit quality and history of timely debt payments of a sizable pool of borrowers that have secured their borrowings with general obligation, unlimited tax pledges; the reserve funds available to cure a potential participant delinquency; and a state-intercept provision which provides for state funds due to a borrower to be paid directly to the bond bank in case of non-payment by a borrower.

STRENGTHS

- State moral obligation pledge

- Large pool of over 150 borrowers

- Strong legal security including underlying GO pledges

- Cash funded debt service reserve

CHALLENGES

- Exposure to fiscal pressures at state level due to state moral obligation pledge

- Average creditworthiness of borrower pool

- Limited liquidity outside of debt service reserve fund

WHAT COULD MAKE THE RATING GO UP

-An upgrade of the state's general obligation or moral obligation rating

-Improvement in the credit strength and loan diversity of the underlying pool of borrowers

WHAT COULD MAKE THE RATING GO DOWN

-A downgrade of the state's general obligation or moral obligation rating would trigger a commensurate downgrade

The principal methodology used in this rating was U.S. Municipal Pool Program Debt published in August 2010. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

The Global Scale Credit Ratings on this press release that are issued by one of Moody's affiliates outside the EU are endorsed by Moody's Investors Service Ltd., One Canada Square, Canary Wharf, London E 14 5FA, UK, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody's office that has issued a particular Credit Rating is available on www.moodys.com.

For ratings issued on a program, series or category/class of debt, this announcement provides relevant regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides relevant regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides relevant regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

Information sources used to prepare the credit rating are the following: parties involved in the ratings, parties not involved in the ratings, public information, and confidential and proprietary Moody's Investors Service information.

Moody's considers the quality of information available on the rated entity, obligation or credit satisfactory for the purposes of issuing a rating.

Moody's adopts all necessary measures so that the information it uses in assigning a rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process.

Please see the ratings disclosure page on www.moodys.com for general disclosure on potential conflicts of interests.

Please see the ratings disclosure page on www.moodys.com for information on (A) MCO's major shareholders (above 5%) and for (B) further information regarding certain affiliations that may exist between directors of MCO and rated entities as well as (C) the names of entities that hold ratings from MIS that have also publicly reported to the SEC an ownership interest in MCO of more than 5%. A member of the board of directors of this rated entity may also be a member of the board of directors of a shareholder of Moody's Corporation; however, Moody's has not independently verified this matter.

Please see Moody's Rating Symbols and Definitions on the Rating Process page on www.moodys.com for further information on the meaning of each rating category and the definition of default and recovery.

Please see ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history.

The date on which some ratings were first released goes back to a time before Moody's ratings were fully digitized and accurate data may not be available. Consequently, Moody's provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Michael D'Arcy Analyst Public Finance Group Moody'sInvestors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 Geordie Thompson VP - Senior Credit Officer Public Finance Group JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 Releasing Office: Moody's Investors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653(C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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