Great Lakes Water Authority

• Issue Currency: United States of America Dollars
• Announcement Date: 28-Aug-2018
• News: Moody`s Investors Service has upgraded to A2 from A3 and to A3 from Baa1 the senior and second lien sewer revenue ratings, respectively, of the Great Lakes Water Authority (GLWA), MI. Concurrently, Moody`s has assigned an A2 rating to GLWA`s $80.46 million Sewage Disposal System Revenue Senior Lien Bonds Series 2018A, $128.61 million Sewage Disposal System Revenue Refunding Senior Lien Bonds 2018B and $43.4 million Sewage Disposal System Revenue Refunding Senior Lien Bonds Series 2018C (Federally Taxable). The outlook is stable. Inclusive of the current sale, GLWA has $1.9 billion of senior lien sewer revenue bonds, $752.2 million of second lien sewer revenue bonds, and $523 million of nonrated junior lien state revolving fund (SRF) loans outstanding. RATINGS RATIONALE The upgrade of the senior sewer lien to A2 reflects the continued trend of strong financial performance by an essential service enterprise whose customer base includes a substantial share of the state`s population. The rating balances the sewer system`s healthy debt service coverage and liquidity against high leverage. The rating also considers the large share of system-wide revenue generated by retail operations in the City of Detroit (Ba3 stable). The A3 rating on second lien sewer revenue bonds incorporates the subordinate claim on pledged net revenue.