Moody's Investors Service said it has assigned a Aa3 rating to the Delaware County Regional Water Quality Control Authority's (DELCORA) $34.5 million sewer revenue bonds, Series of 2013, and upgraded to Aa3 from A1 the rating on DELCORA's $41.8 million of outstanding sewer revenue bonds; the outlook is stable.
Proceeds of the current issue will fund capital improvements, including the design and construction of a new municipal wastewater system.
The authority's debt is secured by its pledge of sewer system net revenues.
The upgrade of the rating to Aa3 from A1 reflects improved debt service coverage, satisfactory financial operations marked by a strong liquidity position, growing system revenues and service area, as well as the authority's entry into a 15-year wastewater treatment contract with the Philadelphia Water Department (water revenue debt rated A1/stable outlook), eliminating long-term uncertainty concerning DELCORA's ability to treat wastewater collected in its Eastern Service Area.
The stable outlook reflects DELCORA's satisfactory security provisions, cash-funded debt service reserve, large and economically stable Delaware County (GO rated Aa1) service area, moderate debt position following the current issue, and revenue stability provided by long-term service contracts with its wholesale customers.