Moody's Investors Service said it has upgraded the rating on Cedar Park Water and Sewer Enterprise, Texas's senior lien revenue bonds to Aa2 from Aa3, affecting $27.8 million of debt.
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The city has an additional $22.7 million in subordinate lien revenue bonds not rated by Moody's. The bonds are secured by a first lien and pledge of net revenues of the city's water and sewer system.
The upgrade to Aa2 reflects the solid debt service coverage, healthy reserves, and low debt ratio. The rating also incorporates the moderate size of the system which has sufficient capacity, irregular rate increases, and weak legal provisions.
