Standard&Poor's Ratings Services affirmed its 'A' underlying rating (SPUR) on Pittsburgh Water and Sewer Authority's revenue bonds, series 2008B-1 and B-2 (formerly series 2008B). The 'A' rating reflects our assessment of the authority's: Stable customer base with a significant commercial component; Good debt service coverage and good liquidity; Participation in the Pittsburgh metropolitan statistical area; and Adequate capacity to meet future water needs. In our view, offsetting factors include: Slightly above-average rates with additional rate increases needed to fund capital requirements related to a consent order with the Environmental Protection Agency (EPA) for the sewer system, the scope of which have not been determined; Highly leveraged system with backloaded debt to avoid rate increases; and Weak legal provisions
