Standard & Poor's Ratings Services said it lowered its rating on waterworks revenue-secured debt issued by or for Evansville, Ind., one notch to A-plus from AA-minus.
The outlook is stable.
This action reflects Standard & Poor's view of the city's fiscal 2014 unaudited financials and fiscal 2015 financial projections indicating stable debt service coverage (DSC) and liquidity, albeit at levels the ratings service deems no longer commensurate with a AA-minus rating.
"We view potential upward rating movement as limited within the two-year outlook period as the utility plans further debt issuance to address capital needs. Upward rating movement would be predicated on the utility establishing a trend of good DSC and improved liquidity while simultaneously issuing new debt," said Standard & Poor's credit analyst Gregory Dziubinski. "The rating could face additional downward pressure if the utility's finances should weaken significantly, especially as the utility continues to address capital needs."
Using water from the Ohio River, the city-owned treatment and distribution system provides water service for more than 61,000 customers, mostly within Evansville.
