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SOLID WASTE BOND RATINGS SECURE, FITCH SAYS -- FITCH FINANCIAL WIRE --

    NEW YORK, Aug. 13 /PRNewswire/ -- Fitch's ratings on solid waste revenue bonds currently reflect the risks of the industry's changing fundamentals. No rating actions are expected near-term.
    A pending Supreme Court case could exacerbate pressures on solid waste projects by barring municipalities from requiring the disposal of waste at specific facilities. Such flow control provisions provide credit support for many projects. A number of solid waste projects already face declining revenues because of lower-than-expected waste flow due to the recession, recycling and conservation efforts, and cheaper alternatives such as landfills. Some municipalities also built projects based on expected generation that failed to materialize. Fitch rates the following solid waste disposal bonds:
    --Prince George's County Solid Waste System, Md.'s 'A+' solid waste management system revenue bonds
    --Union County Utilities Authority, N.J.'s 'A' solid waste system revenue bonds series 1991A, 1991B
    --Montgomery County, Md.'s 'A' Northeast Maryland Waste Disposal Authority solid waste system revenue bonds
    --Atlantic County Utilities Authority, N.J.'s 'A-' solid waste system revenue bonds series 1992
    --Camden County Pollution Control Financing Authority, N.J.'s 'A-' solid waste disposal and resource recovery system revenue bonds
    --Onondaga County Resource Recovery Agency, N.Y.'s 'A-' project and system revenue bonds
    --New Richmond, Wis.'s 'BBB-' solid waste disposal facility revenue bonds (American Resource Recovery of St. Croix, LP Project)
    --Warren and Washington Counties Industrial Development Agency, N.Y.'s 'BB' resource recovery revs (Adirondack Resource Recovery Project)
    Solid waste facilities with a strong market franchise are expected to perform well in this more challenging environment. Projects relying greatly on contractual supports with limited economic reason are likely face significant risk.
    Support for Fitch ratings on issuers of solid waste revenue bonds rests primarily on service area fundamentals, then contractual provisions meant to guarantee revenues. Therefore, the service area should generate sufficient waste at competitive prices to meet operating requirements.
    Community support also is important, as is compliance with federal and state environmental laws. For projects not in compliance, expensive capital improvements are an additional risk. The sale of electricity and recyclables should be examined to assess financial performance. Finally, backup revenue support mechanisms such as a tax-supported pledges, are viewed positively in case revenues do not meet debt service and expenses.
    -0-             08/13/93
    CONTACT:  Rebecca Bachman, 212-908-0516, or Alan Spen, 212-908-0594, both of Fitch SU:  RTG


-- NY035 -- X598 08/13/93
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Publication:PR Newswire
Date:Aug 13, 1993
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