Moody’s Investors Service last week upgraded $84.5 million of outstanding water and sewer revenue bonds sold by the city of Hollywood to A1 from A2.
A report by Moody’s analyst Alexandra Lerma said the upgrade reflects the system’s improved senior-lien debt service coverage, a solid liquidity position that includes the rate stabilization fund, and an adopted five-year rate increase plan.
“The A1 rating also reflects the utility’s mature and large service area, expectation that debt service coverage will remain in-line with management’s projections, the system’s high debt ratio, and strong management team,” Lerma said.
The upgrade comes as Hollywood prepares next week to sell $21.7 million of tax exempt bonds and $30.3 million of taxable Build America Bonds to fund various capital improvements. The structure of the uninsured deal and the exact sale date was not known at press time.
Moody’s assigned the A1 rating to the bonds while Fitch Ratings assigned an A-minus.
Bank of America Merrill Lynch and RBC Capital Markets are underwriting the deal. Public Resources Advisory Group is the financial adviser. Greenberg Traurig PA is bond counsel. Squire, Sanders & Dempsey LLP is disclosure counsel. Moskowitz, Mandell, Salim & Simowitz PA is underwriters’ counsel.
