Fitch Rates Muskegon Heights, MI's $16.5MM Water Rfdg Bonds 'A-'.CHICAGO -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. assigns an 'A-' rating to two series of Muskegon Heights Muskegon Heights, city (1990 pop. 13,176), Muskegon co., W Mich., a suburb of Muskegon; inc. 1903. Its manufactures include foundry items, restaurant furniture, tanks and hoppers, and lubricants. , Michigan's water supply system 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. : --$6,820,000 series 2005; --$9,720,000 series 2006. The Rating Outlook is Stable. The bonds are scheduled for negotiated sale on Dec. 1 through a syndicate led by Robert W. Baird Robert Wilson Baird (born April 1, 1883) helped found the financial services firm that bears his name and led it for more than 40 years. Baird’s father was a professor of Greek literature at Northwestern University in Evanston, Illinois, where Baird grew up. & Co. Both bond series are secured by net revenues of the water supply system, including contractual payments from the City of Norton Shores and the Charter Township A charter township is a form of local government in the U.S. state of Michigan. In general, a township in Michigan, like a county, is a statutory unit of government, in that they only have those powers expressly provided for or implied by state law. of Fruitport pursuant to a water service agreement. Proceeds of both series will refinance outstanding water supply system revenue bonds for debt service savings. Fitch also affirms the 'A-' rating on Muskegon Heights' outstanding water revenue debt. The 'A-' rating reflects the stable financial condition of Muskegon Heights' retail and wholesale water supply system, strong long-term wholesale water supply contracts with neighboring neigh·bor n. 1. One who lives near or next to another. 2. A person, place, or thing adjacent to or located near another. 3. A fellow human. 4. Used as a form of familiar address. v. communities that composed about 64% of 2004 total water system consumption, the financial stability of those communities' systems, and slow but steady economic growth in the overall system service area. The system is in compliance with all regulatory water quality standards and has adequate treatment capacity to accommodate customer growth. Muskegon Heights is a city of 12,000 located 40 miles west of Grand Rapids Grand Rapids, city (1990 pop. 189,126), seat of Kent co., SW central Mich., on the Grand River; inc. 1850. The second largest city in the state, it is a distribution, wholesale, and industrial center for an area that yields fruit, dairy products, farm produce, on the west side of Michigan's lower peninsula Lower Peninsula also Lower Michigan The section of Michigan between Lakes Michigan and Huron and south of the Straits of Mackinac. Noun 1. along Lake Michigan. In 2000, the system increased its treatment capacity by 43% and improved its Lake Michigan intake; these improvements ensured both the availability and quality of long-term water supplies. Average daily demand utilizes just 36% of maximum design capacity, allowing for continued customer growth as well as flow variability due to weather conditions. The city of Norton Shores and Fruitport Township's 33-year water services agreement with Muskegon Heights provides financial stability for the water supply system. By entering into the water services agreement, the two neighboring municipalities benefit from a reliable source of water at an affordable rate. They agree to pay 125% of production and delivery costs annually and debt service requirements allocated to each party based on their annual use of water from Muskegon Heights, which is established as the sole provider. Norton Shores and Fruitport Township each preserve the right to terminate the agreement with four years notice, provided they pay termination payments equal to their proportionate present value share of outstanding bonds based on water flow. This payment provision creates a strong incentive to remain in the relationship and protects bondholders should the agreement be dissolved. The security structure backing debt service payments of this combined retail and wholesale system promotes clear financial accounting and reporting and represents a tangible credit strength. Muskegon Heights pledges a statutory first lien on its water system's net revenues. The system's finances are broken into two separate enterprise funds to promote transparency in accounting of the other communities' debt service and operational payments. The city's water fund accounts for costs associated with retail distribution of treated water to customers in the city; into it, the other cities' 25% premiums over cost are transferred. The water supply fund receives each community's debt service payments. Out of either of the funds, a monthly set aside will occur to cover payment of current debt service costs. A sum sufficient rate covenant Rate covenant A provision governing a municipal revenue project financed by a revenue bond issue, which establishes the rates to be charged users of the new facility. rate covenant is strengthened by the city's stated plans to budget a 1.1 times (x) annual debt service coverage cushion. Existing rates in Muskegon Heights, Norton Shores, and Fruitport should cover projected near-term operational and debt costs. In the past three years, debt service coverage averaged 1.15x; projected coverage through 2007 equals 1.38x. Overall coverage levels are likely to remain slim -- around 1.1x-1.3x annually from the Muskegon Heights enterprise funds -- typical of wholesale water supply systems. The system maintains adequate financial liquidity, including that in a rate stabilization fund Stabilization fund may refer to:
The service area is characterized by a relatively stable residential population base and an industrial profile reflecting durable goods durable goods Goods, such as appliances and automobiles, that have a useful life over a number of periods. Firms that produce durable goods are often subject to wide fluctuations in sales and profits. Also called consumer durables. manufacturing and service sector employment. Unemployment in Muskegon County equaled 6.0% in September 2005, compared to 5.9% for the state and 4.8% for the U.S., and represents a significant decline compared to the 2003 annual rate of 9.0%. County overall personal income grew 4.6% annually from 1993-2003, compared to 4.5% for the state and 5.1% for the U.S. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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