Summary: Ann Arbor, Michigan; Water/Sewer

S&P Global Ratings assigned its 'AA+' rating and stable outlook to Ann Arbor, Mich.'s series 2016 sewage disposal system revenue refunding bonds and affirmed its 'AA+' rating, with a stable outlook, on the city's existing sewage enterprise revenue debt. The rating reflects our opinion of the system's general creditworthiness, including a very strong enterprise risk profile and an extremely strong financial risk profile. Officials intend to use series 2016 bond proceeds to refund the city's series 2008A sewage disposal system revenue bonds. The system's net revenue secures the bonds. Bond provisions are adequate, in our view. The rate covenant requires debt service coverage (DSC) of net revenue at 1.25x or higher. The calculation of the 1.25x additional bonds test is

...S&P Global Ratings assigned its '##+' rating and stable outlook to Ann Arbor, Mich.'s series 2016 sewage disposal system revenue refunding bonds and affirmed its '##+' rating, with a stable outlook, on the city's existing sewage enterprise revenue debt. The rating reflects our opinion of the system's general creditworthiness, including a very strong enterprise risk profile and an extremely strong financial risk profile. Officials intend to use series 2016 bond proceeds to refund the city's series 2008A sewage disposal system revenue bonds. The system's net revenue secures the bonds. Bond provisions are adequate, in our view. The rate covenant requires debt service coverage (DSC) of net revenue at 1.25x or higher. The calculation of the 1.25x additional bonds test is in terms of average annual debt service. The system funds the debt service reserve fund at the least of the three-prong test. The water system had $111 million in debt as of fiscal year-end 2015. Factors that support the very...

Summary