Annapolis, MD (8-1-17) Annapolis Mayor Michael Pantelides announced that in just two years of using revenue bonds to pay for major capital projects, Moody's Investors Service has upgraded the City of Annapolis' water and sewer revenue bonds from Aa3 to Aa2.
“By choosing revenue bonds as a way to borrow money back in 2015 for critical infrastructure projects, we were able to prove, in just two years, that our ongoing fiscal restraint and debt management were worthy of an upgrade,” Mayor Pantelides said.
Moody’s stated, “The upgrade reflects the system’s demonstrated ability to maintain sound debt service coverage, strong liquidity and broad rate-setting authority.”
The revenue bond issuance was to restructure the majority of the city’s water and sewer capital projects, which in 2015 were backed by general obligation bonds.
The restructuring allows the life of the bonds to equal the expected life of the capital projects. When the utilities pay for capital projects based on the life of the project, it allows the residents to pay for their fair share of the debt service now, paying only for what they use.