OREANDA-NEWS. S&P Global Ratings raised its ratings on Decatur Housing Authority, Ga.'s capital fund custodial receipts two notches to 'AA-' from 'A' and Charleston-Kanawha Housing Authority, W. Va.'s capital fund custodial receipts one notch to 'AA-' from 'A+'.

At the same time, S&P Global Ratings revised its outlooks on the 'AA-' ratings on Aiken Housing Authority, S. C.'s and Georgetown Housing Authority, S. C.'s capital fund custodial receipts to negative from stable.

The current debt service coverage (DSC) for Decatur Housing Authority and Charleston-Kanawha Housing Authority is 3.43x and 4.26x, respectively, with a projected two-year outlook DSC of 2.94x and 3.43x, respectively. The projected two-year outlook DSC for Aiken Housing Authority and Georgetown Housing Authority is 2.16x and 2.48x, respectively.

Finally, S&P Global Ratings affirmed its ratings on the capital fund custodial receipts of 51 various issuers (see table).

"Due to the current economic climate and record budget deficits, we recognize Congress is facing increasing pressure to reduce the federal deficit, particularly by limiting federal domestic discretionary spending," said S&P Global Ratings credit analyst Teresa Galicia. "Although modernization funding is still within the parameters to indicate credit support at an investment-grade level on these issues, we believe further long-term continued appropriation reductions could have an effect on the financial strength of these credits."

The outlooks for each rating reflect S&P Global Ratings' assessment of, based on assumed cuts, expected debt service coverage in fiscal 2018. The expected debt service coverage reflects actual fiscal 2016 allocations, followed by a 5% compounded reduction in available capital funds because of appropriation risk, as well as an additional 5% cut each year because of potential funding reallocations to award high-performer bonuses.