Standard & Poor's Ratings Services said it raised to AA-plus from AA the rating on Memphis, Tenn.'s outstanding sewer revenue bonds.
The agency also assigned a AA-plus rating to the city's series 2014 sanitary sewerage system. The outlook is stable.
"The upgrade is based on our expectation that the city will be able to sustain its strong financial risk profile even as it is about to enter a capital-intensive phase associated with a 2012 consent decree," said Standard & Poor's credit analyst Theodore Chapman. The size and scope of the sanitary sewer overflow remediation program is well-defined and will require only limited additional borrowing; the city has already secured a state revolving fund loan to provide the necessary funding beyond that which will come from internally generated revenues.
A first-lien pledge on the sanitary sewerage system's net revenues secures the bonds. The series 2014 bond proceeds will be used to advance refund the system's parity senior-lien 2005 revenue bonds.
