Moody's Investors Service said it has assigned an A3 rating to Marinette, Wis.'s $2.9 million waterworks system revenue bonds, Series 2014A, and downgraded the city's parity water revenue debt to A3 from A1.
Debt service on the bonds is secured by a first claim on the net revenues of the city's water utility. Bond proceeds will finance various capital improvement projects in the city's fiscal 2013 through 2015 capital improvement plans as well as refund certain maturities of the system's outstanding Series 2004 waterworks system revenue refunding bonds to delay amortization. Post-sale, the utility will have $16.8 million of outstanding water revenue debt, of which $3.2 million is rated by Moody's.
The A3 rating reflects satisfactory legal provisions that are enhanced by a city appropriation pledge, the water system's limited service area and concentrated customer base, extremely narrow cash levels further exacerbated by long-term advances from other funds that have been used to supplement recent narrow debt service coverage that is expected to remain pressured due to lack of local rate setting authority and growing debt service costs.