CHICAGO — The Milwaukee Metropolitan Sewerage District lost its top rating from Moody's Investors Service based on the rating agency's new local government general obligation rating methodology.
Moody's lowered the rating by one level to Aa1 from Aaa and assigned a stable outlook on Thursday. The action affects $266 million of general obligation debt. The district also has $705 million of clean water fund loans not rated by Moody's. They also carry a GO pledge.
The district's rating reflects its sound financial operations that benefit from strong financial flexibility and adequate liquidity levels; a $57 billion tax base in the Milwaukee; service-based revenue generated from 10 relatively wealthy communities outside of the district's taxing boundaries; a moderately elevated debt burden; and modest unfunded pension liabilities.
"The stable outlook reflects our expectation that the district's financial operations will continue to remain strong," Moody's said. "It also reflects our expectation that the district will continue to provide treatment services to current non-member users, as the related revenue is an important funding source for both operations and capital."
