Moody's Investors Service said it has downgraded to A3 from A2 the rating on the city of New London, Wis.'s outstanding combined utility enterprise revenue debt.
Concurrently, Moody's has assigned an A3 rating to the city's $3.6 million sewerage, water & electric system mortgage revenue refunding bonds, Series 2013B.
The A3 rating reflects the system's small, stable, and concentrated customer base; satisfactory debt service coverage levels; narrow liquidity; satisfactory rate covenant; and somewhat limited rate setting authority.
The system's debt profile is average, and no additional borrowing is planned in the near term.
The rating also factors the electric system's moderately sized off balance sheet leverage (estimated at $13.1 million) given its take-and-pay contract with Wisconsin Public Power Inc. (WPPI, rated A1/negative), a joint action agency that has issued revenue bonds on behalf of its 51 members.