Press Release|Public Finance
KBRA Assigns A Rating to City of Joliet (IL) Waterworks and Sewerage System's Senior Lien WIFIA Loan (Alternative Water Supply Program - Phase III Project WIFIA 19155IL); Affirms Outstanding WIFIA Loans at A; Outlook Stable
28 May 2025 | New York
KBRA assigns a long-term rating of A to the City of Joliet, IL (the "City") Waterworks and Sewerage System's (the "System") Senior Lien WIFIA Loan Phase III (19155IL) for the Alternative Water Supply Program (AWSP). KBRA also affirms the long-term rating of A for the System's existing two WIFIA loans for the AWSP. The rating outlook is Stable.
Key Credit Considerations
The rating was assigned and affirmed because of the following key considerations:
Credit Positives
- Joliet City Council maintains rate-setting autonomy and has demonstrated a willingness to increase rates in advance of and through the large capital program.
- Historical financial results have been sound, with annual rate increases supporting strong liquidity and debt service coverage.
- Comprehensive strategic capital planning process is addressing long-term water sustainability concerns.
Credit Challenges
- Managing the substantial capital plan and the potential for unanticipated cost increases through 2030.
- System leverage will continue to trend higher as the large capital plan is largely debt 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 debt service coverage or leverage to a level not supportive of the system’s current rating level.
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