Atlanta plans to issue $600 million in bonds for water, sewer work

The verdict is in on Atlanta's water and sewer bonds — and it's not great.

But it could have been worse.

The city hoped to have its near junk-bond credit rating improved before its planned $600 million bond issuance.

That didn't happen.

But at least Atlanta retained its current rating levels, although one bond analyst did lower the "outlook" on Atlanta's ability to repay the debt, citing the economy.

Jim Glass, Atlanta's chief financial officer, said the ratings shouldn't make it harder to sell the bonds this week or cost the city any extra interest.

"I'm not disappointed," Glass said. "I would have been happier with an upgrade. But the ratings agencies are under pretty intense pressure these days."

Atlanta went into critical presentations last month before the bond-rating companies knowing that the city's $4 billion water overhaul was at stake. The city's Department of Watershed Management needed new money to continue building and had to retire variable rate bonds that were about to become very expensive.

Officials steeled themselves for a crisis due to a tightening credit market, the city's already low bond rating and the program's existing $2.6 billion in debt. Some officials feared the combination could make it impossible to continue the borrowing needed to pay for a program ordered by two federal consent decrees.

Glass, though, said presentations to potential investors have gone well, and he expects the City Council to hold a special meeting Thursday to approve the sale.

"I think we'll get a pretty decent rate," Glass said.

The sewer program was once envisioned to be paid for by $1 billion contributions each from the federal government, the state and city taxpayers. But the overhaul grew to include water repairs and other work that pushed the total cost to $4 billion.