Moody's Investors Service has assigned a Aa3 rating to the city of Atlanta's $329 million water and wastewater refunding revenue bonds, Series 2013A and $435 million water and wastewater revenue refunding bonds, Series 2013B, and upgraded to Aa3 from A1 the system's $3.1 billion in outstanding revenue bonds.
The outlook on the bonds is stable.
The bonds are secured by a first lien on the net revenues of the combined water and wastewater system. Proceeds from the Series 2013A bonds will refund portions of the system's Series 1999A and 2001A bonds. Proceeds from the 2013B bonds will refund portions of the system's Series 2001A and 2004 bonds. Neither refunding includes an extension of maturities.
upgrade to Aa3 reflects the system's stable financial ratios, including debt service coverage and liquidity, the recent extension of the municipal option sales tax (MOST) and the extension of the system's sanitary sewer overflow consent decree, which mitigates the need for significant rate increases and debt issuances in the near term.
The rating also incorporates the system's large customer base, which has begun to rebound following the recession, high debt ratio and exposure to variable rate debt and swap agreements.