Fitch Ratings assigned a BBB-plus Tuesday to the upcoming sale of approximately $600 million of Atlanta water and wastewater revenue bonds.
The bonds are scheduled for negotiated sale June 8, and the outlook is stable, Fitch said.
Bond proceeds will be used to retire approximately $210 million of outstanding commercial paper and finance various capital improvement projects for the city’s water and sewer system.
Fitch also affirmed the BBB-plus on the system’s $2.5 billion of outstanding parity bonds. The rating reflects the system’s broad and diverse service area, a demonstrated willingness to raise rates and implement other revenue sources, and “continued success in executing a large and costly regulatory remediation program,” Fitch said.
“Credit concerns center on enormous remaining capital costs, sizeable future debt issuances in addition to an already high debt burden for ratepayers, and a rate structure that is and will continue to be the highest in the nation,” the agency said. “Additional credit drivers include the potential for economic pressures to impact sales tax and rate revenues, as large forecasted annual increases in debt service obligations are likely to pressure the system’s financial profile.”
