Press Release|Public Finance
KBRA Affirms the City of Joliet (IL) Waterworks and Sewerage System Senior Lien WIFIA Loans at A with Stable Outlook
14 Mar 2025 | New York
KBRA affirms the long-term rating of A with a Stable Outlook for the City of Joliet, IL (the "City") Waterworks and Sewerage System (the "System") senior lien Water Infrastructure and Finance Innovation Act (WIFIA) loans.
Key Credit Considerations
The rating was affirmed because of the following key considerations:
Credit Positives
- Joliet City Council maintains rate-setting autonomy and has demonstrated a willingness to increase rates to ramp up revenues in advance of and through the large capital program.
- Historical financial results have been sound, with robust liquidity providing operational flexibility.
- Comprehensive strategic capital planning process is addressing long-term water sustainability concerns.
Credit Challenges
- The Alternative Water Source and Water Main Replacement Programs involve capital projects that are a substantial undertaking for the City. Additional cost escalation could represent a significant financial burden.
- System leverage will increase considerably as capital needs associated with the projects are financed.
- Substantial increases in rates may pressure affordability over the longer-term.
Rating Sensitivities
For Upgrade
- Sustained financial operating results significantly above projections.
For Downgrade
- Project cost overruns or scope changes that result in a significant financial burden, pressuring rates and rate affordability.
- Sustained unfavorable financial operating results which pressure coverage or leverage to a level not supportive of the system’s current rating level.
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