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MOODY'S RAISES RATING ON CHICAGO WATER REVENUE SENIOR LIEN DEBT WITH CLOSING OF LIEN SALE OF NEW JUNIOR LIEN BONDS RATED 'A'

MOODY'S RAISES RATING ON CHICAGO WATER REVENUE SENIOR LIEN DEBT WITH
 CLOSING OF LIEN SALE OF NEW JUNIOR LIEN BONDS RATED 'A'
 NEW YORK, Aug. 10 /PRNewswire/ -- Effective today, Moody's Investors Service raised the rating on Chicago water revenue senior lien bonds from "A" to "A1." The action was taken in conjunction with the assignment of an "A" rating to the city's water revenue bonds, refunding series 1992, expected through negotiation during the week of Aug. 10. The series 1992 bonds are being issued to provide funds to advance refund outstanding water revenue bonds, series 1983, series 1985 and series 1986. The claim of the series 1992 bonds to system net revenues is junior to outstanding series 1989 water revenue bonds.
 In revising the rating, Moody's noted that the city comptroller has covenanted in his determination certificate not to issue any bonds on a parity with the senior lien bonds. While the water revenue bonds ordinance does allow for additional senior lien issues once series 1992 bonds are retired, the comptroller's determination effectively closes the lien. In addition, the relatively modest debt service requirements for senior lien bonds, results in substantially stronger coverage levels, as compared with overall system debt. Legal provisions for senior lien bonds are also stronger, as the rate covenant for the series 1992 junior lien bonds defines coverage to include transfers from the newly created water rate stabilization account. There is no coverage test excluding these transfers.
 Underlying these attributes are an extensive and economically diverse service area, the reliable high quality Lake Michigan water supply, and available system capacity. In contrast to earlier years, when rate increases were infrequent and substantial recent increases, have been more timely and more modest. The establishment of a rate stabilization account is expected to further contribute to this trend.
 Amount of senior lien revenue bonds outstanding (following current offering and excluding refunded bonds): $83,459,686 amount of junior lien revenue bonds outstanding (following current offering and excluding refunded bonds): $155,510,000(A).
 (A) Subject to change.
 -0- 8/10/92
 /CONTACT: Harvey Zachem, 212-553-7731, or Paul Devine, 212-553-0012, both of Moody's/ CO: ST: Illinois IN: SU: RTG


LD-PS -- NY079 -- 8732 08/10/92 18:12 EDT
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Publication:PR Newswire
Date:Aug 10, 1992
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