Standard & Poor's Corp. reversed itself yesterday on whether $243 million of revenue bonds issued by the Connecticut Resource Recovery Authority would be listed on CreditWatch with negative implications.
The rating agency apparently erred last week when it placed the bonds on CreditWatch in connection with the bankcruptcy of Bridgeport, Conn., the city where the authority's incinerator is based.
In a release issued last week, the agency said Bridgeport owned the "underlying property" of the facility.
But yesterday the agency released a statement affirming the A rating on the $228 million series A and B bonds of the authority, and the A-minus rating on $15 million of subordinated series 1989A bonds.
Paul F. Guidone, vice president of operations at the authority, said it owns the property, and that Standard & Poor's had erroneously assumed a lease agreement exists between Bridgeport and the authority.
According to Standard & Poor's, Bridgeport relies on the 2,250-ton-a-day incinerator.
"It is unlikely that Bridgeport would stop paying for this essential service," the agency said. "If it does, [the authority] has indicated that it would not allow Bridgeport's solid waste to be accepted at the facility," which is based in the city.
Even in that situation, the rating agency said, trash from other sources could maintain the authority's income.
Bridgeport filed for protection from creditors under Chapter 9 of the federal Bankruptcy Code last week. The move led Standard & Poor's to drop ratings on the city's uninsured debt to CCC, from BBB. It also placed the securities on CreditWatch, pending developments in the U.S. Bankruptcy Court in Bridgeport.
