Moody’s Upgrades PWC’s Revenue Bond Rating from A1 to Aa3
Upgrade affects current issue and outstanding debt of $179.7 million

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January 3, 2008

Moody’s Investors Service has upgraded Fayetteville Public Works Commission’s revenue bond rating from A1 to Aa3 in conjunction with the sale of $17.4 million revenue bonds-Series 2008.  The upgrade also affects $162.3 million of outstanding revenue debt for the utility giving a total of $179.7 million of debt including the current issue of $17.4 million. 

Utility system growth anticipated from the Base Realignment and Closure Commission (BRAC) was a significant factor in the upgrade according to Moody’s. PWC’s strong financial operations also weighed heavily in the upgrade with factors including PWC’s strong historical and projected total debt service coverage, healthy liquidity position and the adoption of conservative operating policies and procedures.

Moody’s noted that PWC’s utility capacity for electric, water and sanitary sewer is amble. Other factors were  PWC’s  long term contract with Progress Energy, growth of the sanitary sewer system customer base and  the drought having a lesser impact on PWC’s water system’s operations as compared to many  North Carolina water systems.

The current issue of $17.4 million revenue bonds will provide funds for the water and sewer system including the extension of sewer mains to recently annexed areas of the City.  The expected sale date is January 16, 2008. 

The Moody’s upgrade follows Standard & Poor’s Rating Service upgrading PWC’s revenue bond rating from A+ to AA in late December 2007.  S&P cited its higher rating as a reflection of the completion of the city’s multi-phase annexation program, PWC’s gradual strengthening financial profile, the system's very competitive rates, and management's pro-active strategic planning.  The S&P Report said Fayetteville’s electric rates fall below the state averages for all customer classes and its healthy rate stabilization fund allows management to maintain a competitive position. 

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