The rating on Durand, Mich.'s bonds reflects pro forma debt service coverage based on in-place and future rate increases, and an additional bonds test that allows for adjustment. Mitigating strengths include: Low debt levels, with limited future capital needs due to good maintenance and adequate capacity; Satisfactory financial performance, with very strong liquidity; and Rate flexibility afforded by competitive rates. The bonds are secured by the net revenues of the system. Other legal provisions include a debt service reserve fund and a historical additional bonds test (allowing for rate and extension adjustments) of 125% of maximum annual debt service (MADS). Proceeds will be used to improve and build trickling filters. The city's system is small, but stable, serving 1,500 customers
