Fitch Ratings, a San Francisco credit-rating company, affirmed the investment-grade rating of about $184 million in sewer revenue bonds issued in 2008 by the city of Fresno.
The repayment of the bonds is secured by liens on sewer system revenues. About $148.3 million of the bonds are senior lien revenue bonds and are rated AA. Another $35.8 million are subordinate lien revenue bonds rated at AA-.
Fitch analysts reported that the financial performance of the city’s sewer system has been strong enough to service debt and provide enough liquidity at a higher AAA credit rating, but additional debt to fund the expansion of a recycled-water system is expected to affect both debt coverage and liquidity. Still, debt levels will likely remain below average. The outlook for the bonds was deemed stable.
Fitch rates bonds and other debt on a credit-risk scale from AAA to BBB, considered investment grade, and BB to D, which are considered speculative in quality.