Press Release|Public Finance
KBRA Affirms Ratings for City of Joliet, IL - Waterworks and Sewerage Senior Lien WIFIA Loans and Revenue BANs; Outlook Remains Stable
15 Mar 2024 | New York
KBRA affirms the long-term rating of A with a Stable Outlook for the City of Joliet, IL (the "City") senior lien WIFIA Loans and the short-term rating of K1 for the City’s senior lien Waterworks and Sewerage Revenue Bond Anticipation Notes (BANs).
Key Credit Considerations
The ratings were affirmed because of the following key credit considerations:
Credit Positives
- Joliet City Council maintains full autonomy to set rates and has demonstrated willingness to increase rates to ramp up revenues in anticipation of large capital program.
- Historical financial results have been adequate, and liquidity is robust providing operational flexibility.
- Comprehensive strategic capital planning process to address long-term water sustainability concerns.
Credit Challenges
- The Alternative Water Source and Water Main Replacement Programs involve capital projects which are a substantial undertaking for the City. Additional cost escalation could represent a significant financial burden.
- The City's Waterworks and Sewerage System leverage will increase considerably as capital needs associated with the projects are financed.
- Substantial increase in water and sewer 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.
- Sustained unfavorable financial operating results which pressure coverage or leverage to a level not supportive of the system’s current rating level.
To access rating and relevant documents, click here.