Moody’s Investor Services recently upgraded City of Bayonne’s bond rating from Baa1 with negative outlook to Baa1 with stable outlook.
In its report on City of Bayonne, Moody’s attributed the upgrade in rating to the city’s recent progress in reducing its debt burden through the lease-sale of the MUA operations, significant reduction of deferred charges, declining reliance on TAN borrowing and the expectation that fund balance reserves will remain adequate. The rating agency also noted that the Bayonne Municipal Utilities Authority’s (MUA) joint venture with United Water and Kohlberg Kravis Roberts (KKR) is one of the factors that contributed to the rating upgrade. The joint venture eliminated $120 million from Bayonne’s local debt burden by paying off all the MUA’s debt and a portion of the debt of the Bayonne Local Redevelopment Agency.
We first announced the initiation of our joint venture with KKR and Bayonne MUA in December 2012, using our award winning SOLUTION℠ model. United Water’s SOLUTION℠ allows cities to attract new long-term capital from private equity partners to fund infrastructure upgrades and improve operating efficiencies, helping cities meet the growing demand for improved water quality and environmental standards.
As Mayor Mark A. Smith put it: “This upgrade is very good news. It shows that Bayonne has made significant financial progress during my Administration. Moody’s has raised Bayonne’s rating for the first time in more than five years. Our hard work and fiscal discipline are paying off. We have turned a corner and are moving in the right direction.”