NEW ORLEANS, LA – Today, the City of New Orleans and the Sewerage and Water Board of New Orleans announced that Standard and Poor’s Rating Services has upgraded the bond ratings for both the Sewerage and Water Board’s Sewer Revenue and Water Revenue Bonds. This bond upgrade is a direct result of the Sewerage and Water Board’s sustained and stabilized financial position following the New Orleans City Council’s approval of a 10 percent annual rate increase on water and sewer rates in December 2012.
Standard and Poor’s Rating Services has raised the underlying rating (SPUR) on Sewer Revenue Bonds by two notches from ‘BBB’ to ‘A-’ with a stable outlook and raised the underlying rating (SPUR) on Water Revenue Bonds by one notch from ‘BB+’ to ‘BBB-’ with a positive outlook. These bond rating increases could save the Sewerage and Water Board millions of dollars in interest and finance charges upon issuance of any bonds in the future or refinancing of existing debt.
“Standard and Poor’s upgrade of the Sewerage and Water Board’s ratings is a great step as we continue to restore our bond ratings to pre-Katrina levels,” Mayor Mitch Landrieu said. “With our efforts to find federal funding to re-invest in critical infrastructure needs and with our securing of the pre-approval rate increases, the Sewerage and Water Board will be able to continue to meet the future financial needs of its capital improvement program.” The Mayor also said, “We are using our financial resources effectively, efficiently, and wisely in rebuilding our city’s water and sewer infrastructure. These bond rating increases are proof positive of our commitment to long-term, comprehensive operational and financial planning.”
Marcia St. Martin, Executive Director of Sewerage and Water Board said, “These upgraded ratings are good for the Sewerage and Water Board and the City of New Orleans. They demonstrate that the Sewerage and Water Board is making prudent financial decisions in the restoration, recovery and rebuilding of the city’s infrastructure. It should be noted that Mayor Landrieu’s efforts to secure the pre-approved rate increases were critical factors in these rating upgrades.”
In December 2012, Mayor Landrieu, with the support of local business, political, and community leaders worked with the New Orleans City Council to pass a 10 percent annual water and sewer rate increase that will generate $583 million and help fund a large portion of the Sewerage and Water Board’s $3.3 billion infrastructure improvement program composed of over 600 projects that will create 26,000 construction jobs.
The Standard & Poor’s Ratings Services is a Standard & Poor’s Financial Services LLC business.