Moody's Investors Service revised its outlook to developing from negative on $16.6 million of Harrisburg Parking Authority bonds, pending the ability of Harrisburg's receiver, William Lynch, to fully execute his proposed recovery plan in Pennsylvania's capital city.
Moody's rates the Series 2007T bonds a junk-level Ba3.
"Our revision of the outlook to developing reflects our belief that the authority's credit quality will improve if the city is able to execute its recovery plan," Moody's said in a report Wednesday. "Conversely, failure to execute the plan could negatively affect the authority's credit quality and greatly increase risk of loss to parking bondholders."
The plan, which aims to keep Harrisburg out of bankruptcy, includes leasing the city's parking assets for up to 40 years to a state-affiliated authority, as well as a sale of the city's incinerator. Bond financing overruns to an incinerator retrofit project account for about $363 million of Harrisburg's more than $600 million of debt.
Two weeks ago, the Commonwealth Court of Pennsylvania approved the recovery plan, but housekeeping matters such City Council approval of transfers remain. Lynch and his advisory team want to price bonds related to the plan while market conditions are still favorable.
