CHICAGO – Fitch Ratings downgraded nearly $5.9 billion of Detroit water and sewer revenue bonds Monday due to the systems’ weakened financials, but they remain in investment-grade territory due to insulation from the junk-rated city of Detroit’s operations.

“Financial results have trended positive in recent years, but key metrics remain inconsistent with Fitch’s ‘A’ category medians,” analysts wrote of their action lowering $1.9 billion of senior lien water revenue bonds two notches to BBB-plus from A and $1.1 billion of second lien bonds to BBB from A-minus.

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