Water and sewer systems will rely more on debt issuance than pay-as-you-go financing for their growing capital needs this year, a trend that's expected to continue in coming years, Fitch Ratings analysts said in a report issued this week giving the sector a stable outlook.

In addition, issuers will use more subordinate-lien debt and stick to traditional debt instruments such as long-term fixed-rate debt during the next year or two, the analysts predicted.

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