Fitch Affirms Philadelphia, PA Water & Sewer Bonds At `A-`.Business Editors NEW YORK--(BUSINESS WIRE)--Nov. 5, 2001 Fitch assigns an `A-` rating to the sale of about $250 million City of Philadelphia (the city) water & wastewater revenue bonds, series 2001 A, selling by negotiated sale the week of Nov. 12, 2001. Philadelphia may also sell about $36.7 million series 2001 B revenue refunding bonds refunding bond A bond that is issued for the purpose of retiring an outstanding bond. Issuers refund bond issues to reduce financing costs, eliminate covenants, and alter maturities. See also crossover refunding bonds, prerefunding. , subject to interest rates and market conditions, in order to achieve debt service savings. The bonds will be dated Nov. 15, 2001, and the lead underwriter Lead underwriter The head of a syndicate of financial firms that are sponsoring an initial public offering of securities or a secondary offering of securities. Could also apply to bond issues. is Siebert Brandford Shank shank (shangk) 1. leg (1). 2. crus ( 2). shank n. The part of the human leg between the knee and ankle. & Co. series 2001 A represents the city's first new money issue for the water/sewer utility since December 1997, and is structured to smooth out a debt service schedule that is heavily weighted with maturities in the first sixteen years. Fitch upgraded Philadelphia's Water & Wastewater revenue bonds from `BBB BBB A medium grade assigned to a debt obligation by a rating agency to indicate an adequate ability to pay interest and repay principal. However, adverse developments are more likely to impair this ability than would be the case for bonds rated A and above. +' to `A-` in June 2000, in connection with a comprehensive review of default experience and revision of rating guidelines. At that time, Fitch cited recent enhancements to user charges being implemented, coupled with the City's maintenance of best management practices in its operation of the utility. These include strong maintenance program goals, financial monitoring and financial reporting mechanisms. Sizeable capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. focusing on sewer overflow control, storm flood relief, rehabilitation rehabilitation: see physical therapy. and treatment plant improvements will continue to pressure Philadelphia's water and sewer enterprise. Recent and projected rate increases, the first since 1995, are tempered by use of the city's large rate stabilization fund Stabilization fund may refer to:
The city is nearing completion of a large automatic meter reading Automatic meter reading, or AMR, is the technology of automatically collecting data from water meter or energy metering devices (water, gas, electric) and transferring that data to a central database for billing and/or analyzing. installation, which will help collections that have been below average in past years; some large users remain to be fitted with the new meters, but this sector has not contributed to collection problems anyway. Debt service coverage, utilizing draws from the rate stabilization fund, is maintained at covenanted levels of 1.2 times (x), which is low for `A' category utilities. The economy and service area remains stable, but continues to be marked by below average growth prospects. Recent growth in the hotel and tourist sectors may feel the impact of reduced travel subsequent to Sept. 11, but should be tempered by a large local area tourist component, marked by day-trips from surrounding suburbs and nearby metropolitan regions. |
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