Standard&Poor's Ratings Services removed from CreditWatch and lowered the rating on Redlands Financing Authority, Calif.'s wastewater revenue bonds, issued for the City of Redlands, to 'BBB+' from 'A-' based on technical default of a bond covenant. The outlook has been revised to stable. Unaudited fiscal 2003 results indicate debt service coverage of just 0.77x when removing connection fees, down from 1.09x in 2002 and well below the second part of the authority's coverage test of 1.0x coverage per the installment sale agreement. Further credit deterioration could occur should pledged revenues net of connection fees fail to provide coverage levels consistent with or better than levels required by bond covenants. Coverage including connection fees remains strong at 2.19x in
