Moody’s Revises Bayonne, NJ Credit Outlook to Stable for the First Time in Five Years

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...
United Water and KKR Begin Utility Partnership with City Of Bayonne, NJ

United Water and KKR Begin Utility Partnership with City Of Bayonne, NJ

    Today we announced the initiation of our partnership with KKR for water and wastewater system operations in the City of Bayonne, NJ, using United Water’s award winning new ‘Solution’ model to address water infrastructure needs. This brings new private equity investment to address the water challenges that many municipalities face today. Our CEO, Bertrand Camus, first announced this innovative model at 2012 Clinton Global Initiative Annual Meeting, where it was recognized as a featured innovation. United Water and KKR’s partnership with Bayonne was also recognized as Partnership Performance of the Year at the 2012 American Water Summit. Read more about “United Water ‘Solution’: Investing in America’s Future” As a part of this joint venture, we will acquire a 40-year water and wastewater concession from the Bayonne Municipal Utilities Authority (BMUA). Under the contract, BMUA will continue to maintain control of rates charged to customers, the ownership of the water and wastewater system and oversee compliance adherence and customer service performances. Our initial payment of $150 million to the BMUA will be used to eliminate the BMUA’s existing debt and improve its finances. The joint venture has further committed to funding another $157 million into the system over the life of the contract. KKR, which made the investment through its infrastructure fund, will fund 90% of the joint venture with United Water. Our innovative ‘Solution’ comes at a critical time when numerous municipalities across the country are struggling with municipal debt. The investment in Bayonne’s infrastructure will lead to improved service reliability and water quality while maintaining rate stability. The funds will be used to upgrade water systems...