Moody’s Investors Service late Tuesday placed the Ba1 rating for Harrisburg Authority’s $69.4 million of Series 2008 water refunding bonds under review for possible downgrade.
The bonds are secured by net revenues of the authority’s water system in Harrisburg, capital of Pennsylvania. Moody’s doesn’t maintain a rating on the city’s general obligation bonds.
The city is struggling under about $310 million of bond debt related to an incinerator run by the authority. The General Assembly will consider a state takeover of the city when it reconvenes the week of Oct. 17.
Moody’s cited management and billing by the distressed city as a credit weakness for the Harrisburg Authority, and said actions related to the city’s struggles could hurt the water system’s operations.
According to Moody’s, the move reflects insufficient information to gauge the water system’s existing credit quality. It told the authority it wants audited financial statements within 30 days, or it could lower or withdraw the rating.
The Harrisburg Authority has litigation pending against the city over the bond debt, as does surrounding Dauphin County and bond insurer Assured Guaranty Municipal Corp.
A message seeking comment was left with the Harrisburg Authority.