NEW YORK - Standard & Poor's Ratings Services said it placed its A-plus rating on Bristol-Bluff City Suburban Utility District, Tenn.'s 2007 waterworks revenue bonds on CreditWatch with negative implications.
"The CreditWatch action reflects several consecutive years of extremely weak financial performance and uncertainty about when the district will be able to reverse the trend as well as consistently maintain at least minimum legally covenanted debt service coverage," said Standard & Poor's credit analyst Theodore Chapman.
The action affects about $4.3 million of waterworks revenue bonds. Standard & Poor's anticipates reviewing the rating within 90 days, including potentially the audited financial statements for fiscal 2011. Given the district's recent financial history and the challenges management faces in stabilizing its financial profile, Standard & Poor's said it could lower the rating by multiple notches.
The district has had insufficient debt service coverage from 2008 through 2010; audited financial statements for fiscal 2011 are not yet available. Management indicates that the district's financial profile is improving, especially after taking back many key operational functions in 2008 that had been outsourced for several years.
The district provides retail water service to about 3,200 customers in a portion of Sullivan County.
