Standard & Poor’s last week upgraded the New York City Municipal Water Finance Authority’s first-resolution bonds to AAA from AA-plus and its second-resolution debt to AA-plus from AA. Both resolutions have a stable outlook.
The upgrade affects approximately $10.8 billion of first-lien debt and $8.2 billion of second-lien debt.
“The upgrade reflects the authority’s long history of maintaining strong coverage and liquidity and its sound financial and capital planning,” analyst John Sugden-Castillo said in a press release. “The upgrade also reflects the authority’s demonstrated willingness and ability to pass the necessary rate increases to maintain the system’s financial integrity.”
In May, the New York City Water Board raised water rates by 14.5% in the coming fiscal year over the objections of several City Council members.
Moody’s Investors Service assigns its Aa2 rating to the authority’s first-resolution bonds and Aa3 to its second-resolution bonds. Fitch Ratings rates both resolutions AA.
Last week the MWFA sold $334 million of bonds to refund the remainder of its auction-rate debt.
The authority finances the capital program for the city’s water system, which is operated by the Department of Environmental Protection, and provides about 1,185 million gallons of water per day to about nine million people in the metropolitan area.