Woonsocket, RI Water Revenue Bond Rating Lowered To 'A-' From 'A', Placed On CreditWatch Negative, On Low Cash Position

NEW YORK (S&P Global Ratings) Aug. 16, 2024--S&P Global Ratings lowered its long-term rating on Woonsocket, R.I.'s water revenue bonds outstanding to 'A-' from 'A'. Additionally, the bonds are being placed on CreditWatch with negative implications due to lowered financial metrics, along with the water fund actively anticipating approval of a potential rate hike, which, if not approved, could cause a one-in-three chance of another rating downgrade in 90 days. "The downgrade and placement on CreditWatch negative reflects our view that the water system's lower nominal cash position in recent years, along with weaker debt service coverage metrics, is more consistent with the lower rating level," said S&P Global Ratings credit analyst Alan Shabatay. Weaker financial metrics are attributed to

...August 16, 2024 NEW YORK (S&P Global Ratings) Aug. 16, 2024--S&P Global Ratings lowered its long-term rating on Woonsocket, R.I.'s water revenue bonds outstanding to 'A-' from 'A'. Additionally, the bonds are being placed on CreditWatch with negative implications due to lowered financial metrics, along with the water fund actively anticipating approval of a potential rate hike, which, if not approved, could cause a one-in-three chance of another rating downgrade in 90 days. "The downgrade and placement on CreditWatch negative reflects our view that the water system's lower nominal cash position in recent years, along with weaker debt service coverage metrics, is more consistent with the lower rating level," said S&P Global Ratings credit analyst Alan Shabatay. Weaker financial metrics are attributed to a recent moratorium on rate hikes, in order to provide relief to customers due to inflationary pressures. While we acknowledge that management is applying for additional rate hikes through...

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