Moody's Investors Service said it has removed from review and upgraded to Baa1 from Baa2 the North Texas Municipal Water District, Texas's Parker Creek Wastewater Interceptor System revenue bonds, Series 2003 reflecting a stabilization of the credit profile of the largest participant.
The upgrade to Baa1 affects approximately $1.8 million in outstanding contract revenue debt.
The Parker Creek Wastewater Interceptor System revenue bonds, Series 2003 are special obligations of the district and secured by a first lien on and pledge of all revenues or payments to be received by the district from the combined waterworks and sanitary sewer system of the participants and any additional participants.
Currently, the city of Fate and the city of Royse City are the participant cities.
The upgrade to Baa1 from Baa2 reflects a stabilization of the credit profile of the largest participant, the city of Fate Waterworks and Sanitary Sewer System, evidenced by the growing customer base, history of rate adjustments, trend of improving reserve levels, and a manageable debt ratio.
Per the contract among the participants and the district, Fate's annual payment is equivalent to 85% of the total annual requirement on the bonds and the Royse City's annual payment is equivalent to 15% of the annual requirement on the bonds. The strong legal provisions of the authorizing resolution and contract were also factored into the rating.