Moody's Investors Service said it revised the outlook on Jackson, Mississippi, to stable from under review.
At the same time, it confirmed the Ba2 rating on the city’s water and sewer system revenue bonds. About $191 million of debt is outstanding.
“The stable outlook reflects our expectation that rate increases will enable it to improve debt service coverage and cash and combine with state or federal support to help address long-term capital needs,” Moody’s said in a report released late Wednesday.
On Oct. 31, the rating was placed on review for possible withdrawal due to a lack of sufficient financial information.
Moody’s said the rating confirmation reflected its completed review of the unaudited financial results for fiscal 2020, which included the receipt of about $60 million in settlement monies that allowed the water and sewer system to repay the city’s general fund, restore its contingency fund and boost days' cash and debt service coverage.
The system's ongoing challenges include implementing an effective billing and collection system, managing a large consent decree and substantial capital needs that will continue to create narrow operating margins, Moody’s said.
Jackson is the state capital of
Moody’s said factors that could lead to an upgrade of the rating include: effective implementation of billing and collection system. Factors that could lead to a downgrade include: a downgrade of the city's general obligation bond rating as a result of material weakness of liquidity or reserves.
