MOODY'S ASSIGNS Aa2 RATING TO CITY OF VIRGINIA BEACH'S (VA) $97.3 MILLION WATER AND SEWER ENTERPRISE REVENUE BONDS

Posted on: June 10, 2010, 4:13 pm

NEW YORK, Jun 10, 2010 -- Moody's Investors Service has assigned a Aa2 rating to the City of Virginia Beach's $65 million Water and Sewer System Revenue Bonds, Series of 2010A, $9.55 million Water and Sewer System Refunding Revenue bonds, Series of 2010B (Tax-Exempt), and $22.77 million Water and Sewer System Refunding Revenue Bonds, Series of 2010C (Tax-Exempt). Concurrently, Moody's has affirmed the Aa2 rating on the city's $117 million of previously issued party debt, including the current issue. Proceeds of the 2010A bonds will provide permanent financing for Virginia Beach Water and Sewer's ("VBWS", "the system") capital improvement program, which is largely focused on sewer system upgrades to comply with a Department of Environmental Protection consent order. The Series 2010B and Series 2010C bonds are expected to refund various selected maturities of VBWS's outstanding debt for an expected present value savings of at least 3% of refunded principal, without extension of maturity. The bonds are secured by a first lien on net revenues of the system. The Aa2 rating reflects the system's stable and economically strong service area, satisfactory legal provisions including a 1.15 times rate covenant and additional bond test, continued strong financial operations that result in sound coverage of debt service requirements, and a modest debt position with manageable future borrowing needs...

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