Water, Sewer Levels Drop

Fitch Ratings Tuesday downgraded to A-plus from AA-minus the water and sewer bonds issued by Fort Myers.

The drop affects $112.9 million of revenue bonds. The outlook is stable.

Key drivers for the downgrade included high debt levels, diminished rate flexibility, and the area’s weak economy due to housing market stress and unemployment.

Fitch said it would conduct another review of the city’s rating in conjunction with a $69 million refunding and new-money issue scheduled for December.

The deal will refund 2009 variable-rate bonds, make a termination payment to an existing swap, and provide financing for capital improvements to the system.

Fort Myers is the Lee County seat. Fitch on Tuesday upgraded to A from A-minus the rating on $86.4 million of solid-waste revenue bonds issued by the county. The outlook is stable.

The upgrade reflects the solid waste system’s “strong and overall consistent” financial position, deleveraging that has improved debt-service coverage, and a strong cash position, according to Fitch.

“The county’s well established and sound operating system experienced a decline in revenues the past few years due to economic pressure, but net revenues remain adequate to service debt,” analysts wrote.

Lee County covers 800 square miles and has more than 600,000 residents.

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