Moody's gives Aa3/VMIG1 to Mass. water authority refunding bonds

Moody's Investors Service said it assigned Aa3/VMIG1 ratings to the Massachusetts Water Resources Authority's $1.16 billion multi-modal subordinated general revenue refunding bonds, 2008 series A-F.

The expected sale dates were May 28 for series A ($338.005 million); May 29 for series B ($124.595 million), series E ($224.77 million) and series F ($191.705 million); and June 1 for series C ($199.4 million) and series D ($83.615 million).

Concurrently, Moody's affirmed its Aa2 rating on the authority's $3.08 billion of outstanding senior-lien general revenue bonds. The outlook remains stable.

Proceeds of the new issues will refund the authority's series 1997 A and B; 1998 D; 1999 A, C, and D; 2000 B and C; 2001 A and B and 2002 E, F and G subordinated general revenue bonds.

The 2008 A-F bonds will be issued in weekly reset mode. The short-term VMIG1 rating is based on standby purchase agreements from: Dexia Credit Local, Bank of America NA, Bayerische Landesbank, JP Morgan Chase Bank NA and Bank of Nova Scotia.

The authority plans to issue roughly $200 million in debt annually in support of its $1.2 billion five-year capital improvement program. It also plans to issue about $200 million in senior-lien fixed-rate bonds and $100 million in state loans in the fall of 2008 to retire about $77 million of its $191 million in outstanding commercial paper and provide new money financing for fiscal 2008 and 2009 capital projects.

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