Atlanta gets A1 rating on water/wastewater bonds

September 2011, Vol. 66 No. 9

Moody's Investors Service, one of the world’s leading credit rating agencies, affirmed in July Atlanta, GA’s A1 rating on the city’s $3.2 billion water and wastewater revenue bonds.

To satisfy a federal consent decree, Atlanta is in the midst of the largest capital project in its history with a $4 billion upgrade to its sewer and drinking water systems.

Initially, the sewer program was to be paid for by $1 billion contributions each from the federal government, the state and city taxpayers. But the overhaul grew to include water repairs and other work that increased the total cost to $4 billion.

Now, virtually the entire program is expected to be paid for by borrowing, and repaid through a sales tax and rate increases on the system's customer accounts. Moody’s assigned an A1 rating to the bonds for the project. An A1 Moody’s rating means that the bonds are at an “upper-medium grade," and subject to a "low credit risk." AA and AAA are higher ratings. The ratings have an overall impact on how easily municipalities are able to borrow money.