Moody's Investors Service said it has downgraded to A1 from Aa3 the revenue rating on the village of Waunakee, Wis.'s outstanding sewer revenue debt.

Moody's has also assigned an A1 rating to the village's $2.4 million sewerage system revenue bonds, Series 2013B. Post-sale the village will have $2.5 million of outstanding sewer revenue debt.

The bonds are secured by the sewer system's net revenues. Proceeds of the current issuance will be used to finance improvements and extensions to the system and to advance refund the 2006 sewer system revenue bonds.

Despite modest restructuring to maintain flat debt service, the refunding is expected to yield positive net present value savings of 1.8% given lower interest costs. The A1 revenue rating reflects the utility's modestly-sized operations, stable service area favorably located in Dane County (GO rated Aa1/negative outlook), satisfactory legal protections, sound debt service coverage and reserve levels and favorable debt profile.

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