Parties make their cases to Italy president for new leader
* Interior Minister says would support a new Renzi government
Nov 9 - Fitch Ratings has affirmed the following city of Fresno, California, sewer revenue bond ratings: --$67.5 million senior lien bonds at 'AA'; --$159.8 million subordinate lien bonds at 'AA-'. The Rating Outlook revised to Negative. SECURITY The bonds are secured by net revenues of the sewer system, including transfers from the rate stabilization fund and connection fees. KEY RATING DRIVERS GENERAL GOVERNMENT PRESSURES: The Negative Outlook reflects potential for liquidity pressures associated with supporting the city's struggling general fund (Fresno implied general obligation bond rating 'BBB+', Outlook Negative) should borrowing needs increase. Economic pressures on the service area are also a factor in the change in Outlook. SIGNIFICANT, STRESSED SERVICE AREA: The system provides an essential service to an area with over 500,000 residents. The city is the economic hub of the San Joaquin Valley, one of the nation's most productive agricultural regions, but the city's economy remains quite stressed following a very deep economic downturn. STRONG FINANCIAL PERFORMANCE: Financial performance has been very strong with debt service coverage and liquidity levels above 'AAA' medians despite a sharp downturn in the local economy and drop in development-related revenues. The utility appears fundamentally sound, absent pressures from the weak general fund. AFFORDABLE RATES: The City Council implemented the significant rate increases planned at the time of the last bond issue and maintains some rate flexibility due to relatively low sewer rates. MODERATE DEBT BURDEN: Debt levels are currently moderate, and the utility has no further borrowing plans over the next five years. MANAGEABLE CAPITAL NEEDS: The sewer system has significant long-term capital needs, including construction of a recycled water distribution system and expansion of treatment plants. There is considerable flexibility as to the timing of capital plans and has shown a willingness to delay projects as necessary to maintain financial performance. WHAT COULD TRIGGER A RATING ACTION INCREASED GENERAL FUND STRESS: While the current rating assumes a modest amount of interfund borrowing from the sewer fund, the rating could come under pressure if the general fund borrows from the fund repeatedly or more than expected. CREDIT PROFILE OUTLOOK NEGATIVE ON GENERAL GOVERNMENT EXPOSURE The outlook reflects pressures on both the service area economy and concerns that the city's weak general government finances could pressure the sewer utility. Fresno has depleted general fund reserves since the recession due to a sharp decline in revenues that could not be fully offset by expenditure reductions given long-term labor contracts and a rising debt service burden. The general fund is likely to have a slight deficit in the current budget year, which will be financed by a five-year loan from the city's sewer utility. The general fund also requires significant intra-year liquidity support from its utility funds. These liquidity pressures are currently quite manageable for the utility funds. Fitch is concerned that the general fund liquidity need could pose a more significant burden on the utility funds if the city experiences another tax revenue shock or spending reduction plans in the medium term are not implemented as planned. STRONG FINANCIAL PERFORMANCE The sewer system's financial performance is expected to remain very healthy. Senior lien debt service coverage averaged 4.3 times (x) over the three fiscal years ended June 30, 2012, while all-in coverage averaged a strong 2.4x. Unaudited results for 2012 show 4.4x senior coverage and 2.5x all-in coverage. Liquidity has risen rapidly in recent years, as the utility prepared for the upcoming major capital projects. Days cash was more than twice the 'AAA' median at 1,116 days at the end of fiscal 2011 and is projected to rise significantly when the 2012 audit is finalized. The City Council has raised rates as needed to support the utility's large capital improvement program. Rates rose an average of 12% a year over the past five years and are expected to hold at the current level for the next five years. Current rates are affordable at $25.75, or 0.7% of median household income. Rates are also sufficient to provide solid coverage of existing debt and significant excess cash flow to support the utility's capital improvement program. MANAGEABLE DEBT BURDEN, CAPITAL PLAN The sewer utility's $205.1 million 2013 - 2017 capital improvement plan is driven by ongoing repair and renewal of the system and the need to expand its recycled water distribution system, which will help the city reduce over-reliance on ground water. The city has delayed issuing significant additional debt to expand the recycled water system and wastewater treatment capacity due to a slowdown in the economy and development. Instead the city plans to phase its expansion of the recycled water program in steps that can be funded on a pay-as-you-go basis. Expansion of treatment capacity is likely to be delayed until a later capital plan but likely to be a considerable expense in the longer term. Debt is currently moderate at $447 per capita and likely to decline to a low $361 per capita over the next five years. Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings. In addition to the sources of information identified in the Revenue-Supported Rating Criteria, this action was informed by information from CreditScope and IHS Global Insights. Applicable Criteria and Related Research: --'Revenue-Supported Rating Criteria' (June 12, 2012); --'U.S. Water and Sewer Revenue Bond Rating Criteria' (Aug. 3, 2012); --'2012 Water and Sewer Medians' (Dec. 8, 2011); --'2012 Outlook: Water and Sewer Sector'(Dec. 8, 2011). Applicable Criteria and Related Research: Revenue-Supported Rating Criteria U.S. Water and Sewer Revenue Bond Rating Criteria 2012 Water and Sewer Medians 2012 Outlook: Water and Sewer Sector
* Interior Minister says would support a new Renzi government
DUBLIN, Dec 10 A group of British and Irish lawyers are seeking to challenge Britain's decision to leave the European Union in the Irish High Court to try to establish if Brexit can be reversed once divorce talks have been triggered.
WASHINGTON, Dec 9 The U.S. Senate passed legislation on Friday to fund the government through April and President Barack Obama promptly signed it into law, after Democrats who had sought more generous healthcare benefits for coal miners stopped delaying action on the measure.