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LOS ANGELES $225.6 MILLION WASTEWATER REVS 'A+' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, June 9 /PRNewswire/ -- Los Angeles' $225.6 million wastewater system revenue and refunding bonds, series 1993-B and C are rated 'A+' by Fitch. Bonds are scheduled for competitive sale June 15. Los Angeles' outstanding $1.8 billion parity 'A+' wastewater revenue bonds are affirmed. The credit trend is stable.
 Fitch's rating on the wastewater bonds reflects the city's ability to meet and, in some cases, surpass consent decree targets and still maintain a healthy financial profile. Continuous fine tuning of the program by management and economic conditions have allowed for a slight moderation in capital requirements from original estimates. While debt service has increased sharply in the past several years, total coverage is estimated at almost 2.00 times (x) in fiscal year June 30, 1993. Security provisions are conservative and provide good bondholder protection.
 Los Angeles is in the midst of a massive multibillion dollar capital improvement program to upgrade its wastewater treatment facilities and sewage collection system to meet federal and state environmental regulations and city policy. Since 1987, more than $1.7 billion has been spent, and present estimates call for further expenditures of approximately $3.7 billion through 2003. Successful completion of the program will satisfy provisions of the 1987 Clean Water Act and other mandates. The huge system provides wastewater collection, treatment, and disposal services throughout a 600-square mile service area that includes most of Los Angeles as well as other communities and adjacent areas such as Glendale, Santa Monica, and Beverly Hills.
 Ultimate authority for the system rests with the mayor and the city council, which has been very supportive and quick to implement rate adjustments when needed. Despite past, often double-digit, rate increases, the system's average monthly sewer service charge remains competitive. No increase is planned in fiscal 1994, and later, more moderate raises are projected than those in the past.
 Concerns relate to future mandated capital requirements, which will be primarily debt financed and could be susceptible to evolving state and federal environmental policies. The recessionary California economy could adversely affect revenues but is mitigated by the essential nature of the service at reasonable rates. Additionally, the city has benefited somewhat from the downturn by receiving lower construction bids. Debt service is expected to come under some pressure as the capital program peaks but should remain satisfactory at about 1.40x.
 -0- 6/9/93
 /CONTACT: Rebecca Bachman, of Fitch Financial Wire, 212-908-0516/


CO: ST: California IN: SU: RTG

MP -- NY045 -- 0185 06/09/93 13:14 EST
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Date:Jun 9, 1993
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