Moody’s Investors Service last week downgraded Springfield’s waterworks utility revenue bonds to Aa3 from Aa1, citing consolidation of the water revenue pledge and the public utility pledge into one combined utility security.
Moody’s also affirmed its Aa3 rating on the city’s public utility revenue bonds. Nearly $700 million of debt is affected.
Springfield provides a number of services through the Public Utilities Board, including electric, natural gas, water, telecommunications, and transit. The outlook on all the bonds is stable, reflecting the utility board’s “sound management” that has led to a stable fiscal position.
The senior-lien utility bonds, which were issued in 2003 and 2006, are secured by net revenues of the combined utility systems. Additional security is provided by a cash-funded debt service reserve fund. The City Council is able to set retail rates without external regulation.
