The rating on Portage, Mich.'s bonds reflects the following strengths: * A strong service-area economy; * Moderate rates; and * Strong revenue bond debt service coverage and healthy cash balances. Factors that preclude a higher rating include: * A history of reliance on contributed capital for excess coverage; and * Significant debt needs. The outlook revision reflects the utility's strong senior-lien debt service coverage, healthy liquidity, and affordable rates. Underlying the rating is a strong service area economy (Portage's G.O. rating is 'AA-'). Anchored by Pharmacia-Upjohn, a large pharmaceutical manufacturer that employs 5,000, the city is home to a variety of manufacturing establishments and a regional mall. Annual unemployment remains low at 2%-3%. The city has also experienced growth, evidenced
