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KBRA Affirms A+ Rating for the Sewerage and Water Board of New Orleans, LA - WIFIA Loan for the Sewer and Water Line Rehabilitation, Repair and Replacement Program; Stable Outlook

14 Oct 2025   |   New York

Contacts

KBRA affirms the long-term rating of A+ for the Sewerage and Water Board of New Orleans (SWBNO) WIFIA Loan for the Sewer and Water Line Rehabilitation, Repair, and Replacement Program. The Outlook is Stable.

The rating affirmation reflects SWBNO’s autonomous rate-setting authority, solid sewer system financial performance, and strong legal provisions supporting the sewer system senior debt, including the WIFIA Loan. Counterbalancing these strengths is the large capital plan, designed to comply with mandated environmental and aged-infrastructure improvements; and rate affordability concerns given the service area’s high poverty level and population decline in recent years.

Key Credit Considerations

The rating was affirmed because of the following key credit considerations:

Credit Positives

  • Providing an essential utility service with local rate-setting authority.
  • Sewer system’s historically solid financial performance.
  • Strong legal provisions for the WIFIA Loan, including a rate covenant of 1.25x and fully funded debt service reserve fund.

Credit Challenges

  • Major sewer capital plan to fund mandated and aging infrastructure updates.
  • Moderated rate flexibility given the service area’s somewhat weaker demographic profile.

Rating Sensitivities

For Upgrade

  • Successful implementation of capital projects within budget, supported by timely rate increases, resulting in stronger than projected debt service coverage.

For Downgrade

  • Potential service area affordability challenges that compromise the Board’s ability to raise rates, especially given the sewer system’s future capital needs .
  • Material delay or inadequate replacement of needed sewer system improvements which increase future capex and debt requirements, and pressures financial coverage below the projected level.

To access ratings and relevant documents, click here.

Methodologies

Disclosures

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

Doc ID: 1011814