Moody's Downgrades Portland Water/Sewer, Tenn., Revs to A3

NEW YORK - Moody's Investors Service said it has downgraded the city of Portland's Water and Sewer District, Tenn.'s senior lien debt obligations to A3 from A2 affecting $10.8 million in outstanding debt.

The bonds are secured by the net revenue of the district's water and sewer system.

The A3 rating and downgrade reflects the district's weakened financial position, which violated the rate covenant in fiscal 2009, 2010, and 2011. The rating also reflects the essentiality of the service, small, but stable customer base, and a large rate increase in fiscal 2012 projected to improve debt service coverage levels.

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