Standard & Poor's Corp., citing the improved financial shape of the Massachusetts Water Resources Authority, Friday upgraded the Boston Water and Sewer Commission's senior and junior lien parity debt to A from A-minus.

The upgrade covers $179 million of senior lien parity debt and $19 million of junior lien parity debt.

Standard & Poor's said that aside from the better performance at MWRA, Boston Water and Sewer has successfully refinanced some of its debt and has a "diverse, stable, and institutional-based revenue stream."

Boston Water and Sewer is rated A by Moody's Investors Service and A-plus by Fitch Investors Service.

"I am extremely pleased with our upgrade," said executive director Robert Ciolek. "Both the MWRA and Boston Water and Sewer have proven we are able to cope with the financial struggles of providing affordable water service to our customers."

The MWRA provides debt service on about $1.9 billion in debt. One-third of the funds needed to pay the debt service comes from the city of Boston.

MWRA was charged in the mid-1980s with financing the cleanup of the Boston Harbor and construction of the Deer Island sewage treatment plant.

It was initially anticipated that Boston Water and Sewer's share of payments to the MWRA would increase 18% by 1998.

But, because of MWRA cost revisions and a favorable interest rate climate, the ratings agency said it anticipates an 11% increase.

Ciolek -- who also serves on the MWRA's board of directors -- said that two refundings in 1993 have saved the agency $12 million in debt service requirements.

He said that while MWRA is focusing on the harbor cleanup and Deer Island project, Boston Water and Sewer is more directed towards maintaining the water system infrastructure in the city.

Standard & Poor's also cited as a positive that Boston Water and Sewer's has a $13 million untapped rate stabilization fund that is expected to grow to $34 million in 1994.

Ciolek said Boston Water and Sewer is tentatively scheduled to sell $50 million of new money senior lien parity debt in the summer of 1994.

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