Moody's Investors Service has downgraded the city of Oshkosh, Wis.'s senior lien storm water revenue debt to A1 from Aa3.
Post sale, the city will have $50.4 million of senior lien storm water revenue debt outstanding.
Additionally, the storm water system supports the repayment of $8.9 million of general obligation debt, which is junior lien to the revenue debt.
Concurrently, Moody's has assigned an A1 rating to the city's $8.5 million storm water utility revenue bonds, Series 2014A. These senior lien bonds are secured by the net revenues of the city's storm water utility and proceeds will finance storm water system improvements and extensions. The negative outlook has been removed.
The A1 rating is based on the system's satisfactory senior lien debt service coverage with overall coverage that fell below sum sufficient in fiscals 2011 and 2012; currently healthy, though declining reserves; active history of rate increases; satisfactory legal provisions; and a substantially elevated debt ratio with additional borrowing planned.
Additionally, the rating reflects the system's stable service area, covering the city of Oshkosh (GO rated Aa3), and the city's commitment to contribute funds, subject to appropriation, to cover annual debt service in the event of shortfalls.
