The rating on Austin, Texas' bonds reflects: A subordinate lien on net revenues of the water and wastewater system, junior to approximately $1.9 billion in combined prior-lien utility system obligations; Liberal legal provisions, including a permissive additional bonds test, which is a concern given the large capital plan; The acquisition of a 100-year water supply through an agreement signed in October 1999 with the Lower Colorado River Authority (LCRA); Strong debt service coverage of 2.3 times (x) for fiscal 2000, and projected to remain at or above 1.6x through 2006; and A sizable capital plan of approximately $690 million over the next five years, of which as much as 70%-75% is expected to be financed with additional debt. The rating
