Oakdale, Calif., officials are scrambling to restructure debt and planning to raise sewer rates after the city missed an Aug. 31 debt service payment on an unrated state revolving fund loan secured on a parity basis with the city’s 2002 sewer revenue bonds.
The payment default resulted Moody’s Investors Service Friday downgrading to B1 from Baa1 the city’s 2002 sewer enterprise bonds. The downgrade to speculative grade was the rating agency’s second on the bonds over the past several months. Moody’s downgraded Oakdale’s bonds in May to Baa1. from A3