Fitch Affirms Massachusetts Water Pollution Trust (MA Water Resources Auth Prgrm) Revs at 'AAA'.CHICAGO -- As part of its continuous surveillance effort, Fitch Ratings affirms the 'AAA' ratings on the Massachusetts Water Pollution Abatement Trust's (Massachusetts Water Resources Authority loan program) $56.8 million in outstanding revenue bonds (series 1993A, 1993B, 1995A, 1998A, and 2002A) and the $63.8 million in outstanding subordinate revenue bonds (series 1999A). The Rating Outlooks are Stable.
The 'AAA' ratings for the Massachusetts Water Pollution Abatement Trust (MWPAT) Massachusetts Water Resources Authority (MWRA MWRA Massachusetts Water Resources Authority
MWRA Mid-West Regional Authority (Ireland)
MWRA Married Women of Reproductive Age
MWRA Midwest Whippet Racing Association
MWRA Medical Waste Regulatory Act (Michigan) , or the authority) program bonds reflect substantial debt service reserves, which currently total approximately $169.5 million, or 140% of outstanding senior and subordinate bond principal; this does not include pledged reserves released to the deficiency fund established under the MWPAT's pool program (rated 'AAA' with a Stable Outlook by Fitch), which are also available for payment of debt service. The reserves are sufficient for the senior and subordinate MWPAT MWRA program bonds to perform even assuming 100% permanent loan defaults over the life of the bonds.
MWPAT MRWA's program debt service reserves are invested primarily in investment agreements, with providers rated no lower than the second highest rating category and/or fully collateralized by direct U.S. Treasury or Agency securities with third-party custodians. The sustained credit quality of the reserve investments is important to maintaining the current 'AAA' ratings.
The MWPAT issues bonds to fund loans for its clean water and drinking water state revolving funds (SRF SRF
somatotropin-releasing factor ). The Trust has issued bonds under indentures for four separate programs, one each for the MWRA, the City of New Bedford, and the SESD SESD Science and Ecosystem Support Division
SESD Space Electronic Security Division
SESD South East San Diego (San Diego, California, USA) , and also for MWPAT's larger state-wide pool program. The MWPAT MWRA outstanding program bonds were issued under the standalone indenture to prevent borrower concentration in the pool program due to significant capital requirements associated with MWRA (senior and subordinate revenue bonds rated 'AA' and 'AA-', respectively, with a Stable Outlook by Fitch).
The primary security for the bonds is loan repayments from MWRA. In addition, the Trust pays a portion of bond debt service with amounts received by the Commonwealth; these Commonwealth Assistance payments result in a net maximum 2% interest rate to MWRA. The bonds are further secured by debt service reserves that are maintained at a minimum of 40% - 50% of outstanding bond principal. Reserves dedicated to the MWPAT MWRA program bonds substantially exceed this level because some of the MWPAT MWRA bonds have been escrowed to maturity Escrowed To Maturity
The condition of a bond that has been repaid in advance by means of an escrow account, which holds the funds needed to pay the periodic coupon payments and the principal. through refunding bonds issued through the MWPAT state-wide pool program. As the MWPAT MWRA bonds amortize, a portion of the reserves are released to the deficiency fund and are available to cover any shortfalls within any of the trust's standalone pool programs as well as MWPAT's state-wide pool program on a parity basis.
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