Moody’s upgrades NMFA’s rating

A national credit rating agency gave an “all clear” to the New Mexico Finance Authority this week and reinstated the controversial agency’s high bond rating.

Moody’s Investor Service said it removed the state Finance Authority from its watch list after State Auditor Hector Balderas’ special audit of the agency found no evidence of theft or embezzlement related to the fraudulent 2011 audit the Finance Authority submitted to investors. The fraudulent audit was discovered last July.

Moody’s also cited “positive organizational changes” within the NMFA for reinstating the agency’s high-ranked bond rating Tuesday.

A downgrade of the agency’s bond ratings would drive up future borrowing rates for the Finance Authority, which now holds about $1.2 billion in outstanding debt issued to help New Mexico communities and schools finance capital improvement projects.

The confirmed bond rating comes as the Finance Authority prepares to issue $50 million in new bonds in June to pay for local government projects.

Finance Authority board Chairwoman Nann Winter, called the reinstated credit rating great news. Winter was appointed to the post by Gov. Susana Martinez after the fraudulent audit was discovered.

“This is great news for the NMFA, and more importantly, for its New Mexico borrowers,” Winter said in a statement Wednesday. “I can’t begin to tell you how many resources and man-hours the board, the agency and Gov. Martinez’s office put into this turnaround. I’m particularly pleased Moody’s recognized the strong governance and positive organizational changes.”

Since July, the Finance Authority parted ways with former CEO Rick May and Chief Operating Officer John Duff.

Former NMFA Controller Greg Campbell, who left the agency before the faked audit was discovered, has admitted falsifying the financial report and pleaded guilty to three felony charges.

The Finance Authority chairwoman said Wednesday that the agency still has work to do to prevent future problems. To start, Winter said, the Finance Authority is preparing to hire a full-time internal auditor for the agency.

Another key national credit rating agency, Standard & Poor’s, reaffirmed the Finance Authority’s top credit rating in October.
— This article appeared on page B1 of the Albuquerque Journal