Moody's Investors Service said it has upgraded the city of Detroit's sewer enterprise ratings to Baa3 and Ba1, respectively, for senior and second lien revenue securities.
Concurrently, Moody's has revised the outlook to positive from developing. The sewer enterprise has $2,018.2 million of senior lien and$838.7 million of second lien debt outstanding.
The Baa3 senior lien and Ba1 second lien ratings incorporate improved operations of the Detroit Water and Sewer Department (DWSD). The management team has implemented strategies to increase efficiency, improve billing collections, provide better services, track financial performance, and update capital planning. The sewer enterprise financial profile remains stable with adequate coverage, strong liquidity, and high debt, while still pressured by looming capital needs.
Moody's also upgraded the city's water enterprise ratings to Baa3 and Ba1, respectively, for senior and second lien revenue securities. Concurrently, Moody's has revised the outlook to positive from developing. The water enterprise has $1,691.7 million of senior lien and$619.9 million of second lien debt outstanding.
