A national bond rating agency has affirmed its low rating and negative outlook for Jefferson County's sewer revenue warrants, saying that the county may face challenges in executing its bankruptcy exit plan "given the rising interest rate environment," according to AL.com today. Moody's Investors Service affirmed the county's Ca rating, which is deep in junk territory and affects $3.1 billion of outstanding sewer debt. Moody's wrote in a news release that risks could affect the county's debt refinancing, including "rising interest rates, insufficient investor demand for bonds at the projected credit spreads, and a higher percentage of warrant holders who choose to waive their claims against the bond insurers in exchange for a higher recovery rate." The county plans to issue approximately $1.9 billion in refinanced sewer warrants as part of a plan to exit bankruptcy by the end of the year. County officials have already said that the plan will not work if warrants were issued today because of higher-than-expected interest rates.
