Sunday, August 21, 2016

Moody's downgrades Jackson's debt

Moody's downgraded Jackson's water & sewer bonds to a Baa3 rating in this notice issued last week:

Moody's downgrades to Baa3 the City of Jackson's (MS) Water & Sewer Revenue Debt; 
outlook remains negative

Global Credit Research - 17 Aug 2016

New York, August 17, 2016 -- Summary Rating Rationale

Moody's Investors Service has downgrade, to Baa3 from A3, the rating on the City of Jackson's (MS) Water and Sewer System revenue bonds, affecting approximately $227.9 million in rated debt. The outlook remains negative.The downgrade reflects deterioration of financial performance in fiscal 2016 driven by the persistent under-collection of billed services coupled with the expectation for continued financial challenges due to inadequate rate management practices and the long term pressures on the system's finances stemming from mandated outsized capital needs. Additional considerations include the system's sizeable customer base with institutional presence, weak socioeconomic indicators, and limited concentration within the top customers.

Rating Outlook

The negative outlook reflects the ongoing challenges related to the persistent under-collection of billed services and management's ability to articulate a plan to balance future operations. The outlook further considers the system's outsized capital needs and the uncertainty surrounding its financial position and ability to absorb additional debt.

Factors that Could Lead to an Upgrade

Stabilization of billing system leading to a trend of improved financial performance including strengthened coverage ratios and bolstered liquidity

Demonstrated adherence to a multi-year, comprehensive plan to address consent decree requirements and aging facility infrastructure, while maintaining key financial metrics

Significant reduction of receivable position leading to improved liquidity

Factors that Could Lead to a Downgrade

Failure to maintain adequate debt coverage ratios

Further erosion of liquidity position or significant additional receivable growth

Continued decline in financial flexibility, whether for capital or operational needs

Significant additional leverage of system assets and/or revenues

Legal Security

Revenue bonds are secured by the net revenues of the system.

Use of Proceeds


Obligor Profile

The water and sewer system serves an area of approximately 150 square miles, including the City of Jackson and portions of Hinds, Rankin, and Madison counties. The system served 56,998 water and 50,709 sewer customers in fiscal 2015. Residential accounts constitute approximately 89% of the customer base.

Kingfish note: NASDAQ defines Baa3 as:

The lowest rating of investment grade Moody's Long-term Corporate Obligation Rating. Obligations rated Baa3 are subject to moderate credit risk. They are considered medium grade and as such may possess certain speculative characteristics. Rating one notch higher is Baa2.


Anonymous said...

Looks like we can expect more downgrades.

Anonymous said...

Only 1 grade above junk.

Anonymous said...

Nothing that a massive property tax hike won't solve upon the backs of the remaining few suckers still paying taxes in Jackson.

Anonymous said...

Anyone know the price the bonds are selling for now? Which issues are the most deeply discounted now? Might be a good opportunity.

Anonymous said...

For sure it means that Jackson will have to pay more to borrow money.

Anonymous said...

...wait for my surprised face!

Anonymous said...

3:23 PM I'm not a sucker. I pay high taxes in Jackson cause my house won't sell in Jackson. Many looker no offers. Any solutions? I've lowered the price many times. I've lost Homestead Exemption. So, property are doubled.

Anonymous said...

I'll try again.
If any of you noticed, the Clarion Ledger buried the story about the downgrade on page 4 of Saturday's paper. With no mention of Yarber's illegal useage of the rainy day fund to cover the city's ass. The paper ran stories on the front page that really meant nothing. As a taxpaying Jackson resident, the fact that Yarber wants a 3 mil increase in my taxes, and Moody's indicates that the increase will be more than that, THAT'S something that should have been on page one. Not buried on page 4, with smaller headline text than the rest of the page.
Apparently Jackson Jambalaya found something about my original post about this objectionable. What, Kingfish, could that have been? The fact that the useage of the rainy day fund was illegal? Tell me what about that is incorrect. He did this without the notification, or consent of, the council.

Anonymous said...

Hmmmm, sounds familiar. Didn't the State of Mississippi just get downgraded too? And no blaming that on the democrats. The Gov, Lite Gov and Speaker have a big ole R by their name. And a supermajority to boot. Big government pork barrel bond bill, $56mm that was lost or missed and a tax cut during bad economic times equals downgrading. Just wait till next year folks. I suspect more financial follies to come.

Anonymous said...

@9:14 - no, the state of Mississippi did not just get downgraded.

Nice try, though.

Anonymous said...

All of you God fearing Christians please pray that Jackson can make it to July when we will be rid of this incompetent fool currently serving as mayor. Hopefully all of you white Jacksonians in wards 1 and 7 who gave him 91% and 71% of your votes respectively have come to your senses and will admit your mistake. If not for your votes Jackson would be as screwed up as it is. Your not voting for Mr Lumumba because of his name is the cause of the current problems we face. Since I think most of you are probably racist, not stupid, I believe you have seen the error of your ways and like most BLACK Jacksonians will never vote for Tony Yarber again.

Anonymous said...

People should start reading about what happens to suburbs when a major city fails. Chicago is a great one to research. Detroit. Baltimore. Anyone want to guess what happens when a major populace can't afford law enforcement? This is one domino in a line that ultimately leads to rankin and Madison having some very interesting issues to deal with and ultimately pay for.

Anonymous said...

@10:54 Yeah voting for Lumumba would've been real smart. Judging by the company he keeps I'm sure that he really wants to include all residents..... Let's elect someone with common sense, budget sense, and doesn't have it out for white people!

Anonymous said...

I thought Lynn Fitch said Mississippi would be downgraded and then it happened.

Anonymous said...

With BabaChucksterLumumbafooJr in office it would have been WORSE.

Anonymous said...

Anonymous said...

What actually happened was the state's credit outlook was lowered to negative. The next step could be actually downgrading the state unless we fix our financial woes.

Anonymous said...

@7:04- sell raffle tickets, donate to charity, rent to some firebug and collect on the insurance, walk away and take your losses, lower the price until somebody buys it, incorporate, sell your home and deduct the corporate losses from your income....sell it for a loss?

Obviously, there is math involved: if you pay $2k a year in taxes and insurance for a property you can't get $100k for, you have 50 years before it is a loss. How much are you willing to invest?

You have my sympathies. Be happy knowing that you can afford it, for now.

/serious answers....facing the same prospect for a property I inherited in another county

Drill Deeper, Drill Deeper.. said...

"People should start reading about what happens to suburbs when a major city fails. Chicago is a great one to research. Detroit. Baltimore. Anyone want to guess what happens when a major populace can't afford law enforcement?"

Hold on! Sounds like you're admitting what you've been denying for years.

But, as to your last sentence, Jackson HAS been able to afford law enforcement for the past thirty years and look where it got you.

What has put Jackson in the crapper more than anything else is lack of proper law enforcement, poor crime prevention programs, ineffective judicial response to thugs arrested and whistling past the jail house while bed-sheets hang out the windows.

You can piddle-dick around with multiple accusations and pointing fingers, but, it ALL goes back to the paragraph immediately above this one.

Anonymous said...

@ 7:04

I faced a similar problem when I tried to sell in the Heatherwood area back in 2013/2014.

I first used a realtor that lived in the neighborhood. That was a huge mistake. My house was priced similar to other houses in the Heatherwood area, but way above other nearby neighborhoods. Once that contract ran out, we got a realtor who was known for being brutally honest with sellers. She pulled up the comps and showed where we were priced about 25K too much (on a 115K house listed for 140K). We dropped the price to 119K and got offers immediately.

Unfortunately, I bought for around 130K and did a lot of improvements to the house. In the end, I lost a good chunk of money but was better than losing homestead and paying the ridiculous taxes in Hinds county when I moved.

Anonymous said...

Uh oh, jackholians. Looks like the Mayor's prayer list just got longer. Again.

Anonymous said...

Taking a loss on the house now would be better than taking a bigger loss after paying taxes, upkeep, and insurance. It will be many years before Jackson sees any better days, if it ever does.
Jackson leadership is a joke. The people are not going to elect anyone else. It will get worse.

Anonymous said...

6:38 AM
8:18 AM
9:18 AM
Thanks for the excellent, accurate, and timely info. My mistake was putting to high a price on it at 1st. I forgot to factor in that time passing will have a tremendous will impact my cash flow. In other words I'll be taxed out of my house soon if I don't sell it. Talking about govt. putting the squeeze on me. Also, congress passing Frank Dodd has put a wet blanket on real estate. Talk about the perfect real estate storm. I have absolutely no faith in city, county, state, federal govt. anymore. They ALL suck the average citizen dry. That's why real estate is not good investment anymore.

Anonymous said...

Take you losses on the sale of a house now for each day that goes by it will get worse. Jackson will never see better days, never.

Anonymous said...

What can make it worse is when another flood comes and it will. People will just walk away and make no effort to repair. That will speed up the dying process about 10 years.

Anonymous said...

10:04 dodd Frank has done nothing to prevent sub prime loans. FHA is giving zero down payment loans to lower income people in Gluckstadt (rural area). Government policy driving people out of the cities.

Anonymous said...

There are some homeowners in NEJax that went debt deep biggie sizing in the housing bubble run-up who are staring at $125-$200k losses.

Anonymous said...

Kingfish, the City of Pearl was recently downgraded as well. Maybe the citizens of Pearl should really think about who they are electing to run the city. They certainly don't want to ride down the hell hole (pothole) that jackson is trapped in.

Anonymous said...

Bitch betta have my money!

Anonymous said...

Who would have ever thunk it??? Phil and Tony have something in common after all!!

Anonymous said...

Why so shocked???
If this looks and smells of fear then your right. Justice is coming and those who live off the empty hopes of others will one day beg for redemption. Jackson, the city of want-a-be's living in a sewer of total destruction. The biggest question remains, who's going to flush for the last time???

Anonymous said...

Wait let me edit my prior comment.... Pearl's rating is WORSE than Jackson.

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Trollfest '09

Trollfest '07 was such a success that Jackson Jambalaya will once again host Trollfest '09. Catch this great event which will leave NE Jackson & Fondren in flames. Othor Cain and his band, The Black Power Structure headline the night while Sonjay Poontang returns for an encore performance. Former Frank Melton bodyguard Marcus Wright makes his premier appearance at Trollfest singing "I'm a Sweet Transvestite" from "The Rocky Horror Picture Show." Kamikaze will sing his new hit, “How I sold out to da Man.” Robbie Bell again performs: “Mamas, don't let your babies grow up to be Bells” and “Any friend of Ed Peters is a friend of mine”. After the show, Ms. Bell will autograph copies of her mug shot photos. In a salute to “Dancing with the Stars”, Ms. Bell and Hinds County District Attorney Robert Smith will dance the Wango Tango.

Wrestling returns, except this time it will be a Battle Royal with Othor Cain, Ben Allen, Kim Wade, Haley Fisackerly, Alan Lange, and “Big Cat” Donna Ladd all in the ring at the same time. The Battle Royal will be in a steel cage, no time limit, no referee, and the losers must leave town. Marshand Crisler will be the honorary referee (as it gives him a title without actually having to do anything).

Meet KIM Waaaaaade at the Entergy Tent. For five pesos, Kim will sell you a chance to win a deed to a crack house on Ridgeway Street stuffed in the Howard Industries pinata. Don't worry if the pinata is beaten to shreds, as Mr. Wade has Jose, Emmanuel, and Carlos, all illegal immigrants, available as replacements for the it. Upon leaving the Entergy tent, fig leaves will be available in case Entergy literally takes everything you have as part of its Trollfest ticket price adjustment charge.

Donna Ladd of The Jackson Free Press will give several classes on learning how to write. Smearing, writing without factchecking, and reporting only one side of a story will be covered. A donation to pay their taxes will be accepted and she will be signing copies of their former federal tax liens. Ms. Ladd will give a dramatic reading of her two award-winning essays (They received The Jackson Free Press "Best Of" awards.) "Why everything is always about me" and "Why I cover murders better than anyone else in Jackson".

In the spirit of helping those who are less fortunate, Trollfest '09 adopts a cause for which a portion of the proceeds and donations will be donated: Keeping Frank Melton in his home. The “Keep Frank Melton From Being Homeless” booth will sell chances for five dollars to pin the tail on the jackass. John Reeves has graciously volunteered to be the jackass for this honorable excursion into saving Frank's ass. What's an ass between two friends after all? If Mr. Reeves is unable to um, perform, Speaker Billy McCoy has also volunteered as when the word “jackass” was mentioned he immediately ran as fast as he could to sign up.

In order to help clean up the legal profession, Adam Kilgore of the Mississippi Bar will be giving away free, round-trip plane tickets to the North Pole where they keep their bar complaint forms (which are NOT available online). If you don't want to go to the North Pole, you can enjoy Brant Brantley's (of the Mississippi Commission on Judicial Performance) free guided tours of the quicksand field over by High Street where all complaints against judges disappear. If for some reason you are unable to control yourself, never fear; Judge Houston Patton will operate his jail where no lawyers are needed or allowed as you just sit there for minutes... hours.... months...years until he decides he is tired of you sitting in his jail. Do not think Judge Patton is a bad judge however as he plans to serve free Mad Dog 20/20 to all inmates.

Trollfest '09 is a pet-friendly event as well. Feel free to bring your dog with you and do not worry if your pet gets hungry, as employees of the Jackson Zoo will be on hand to provide some of their animals as food when it gets to be feeding time for your little loved one.

Relax at the Fox News Tent. Since there are only three blonde reporters in Jackson (being blonde is a requirement for working at Fox News), Megan and Kathryn from WAPT and Wendy from WLBT will be on loan to Fox. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both and a torn-up Obama yard sign will entitle you to free drinks served by Megan, Wendy, and Kathryn. Get your tickets now. Since this is an event for trolls, no ID is required. Just bring the hate. Bring the family, Trollfest '09 is for EVERYONE!!!

This is definitely a Beaver production.

Note: Security provided by INS.

Trollfest '07

Jackson Jambalaya is the home of Trollfest '07. Catch this great event which promises to leave NE Jackson & Fondren in flames. Sonjay Poontang and his band headline the night with a special steel cage, no time limit "loser must leave town" bout between Alan Lange and "Big Cat"Donna Ladd following afterwards. Kamikaze will perform his new song F*** Bush, he's still a _____. Did I mention there was no referee? Dr. Heddy Matthias and Lori Gregory will face off in the undercard dueling with dangling participles and other um, devices. Robbie Bell will perform Her two latest songs: My Best Friends are in the Media and Mama's, Don't Let Your Babies Grow up to be George Bell. Sid Salter of The Clarion-Ledger will host "Pin the Tail on the Trial Lawyer", sponsored by State Farm.

There will be a hugging booth where in exchange for your young son, Frank Melton will give you a loooong hug. Trollfest will have a dunking booth where Muhammed the terrorist will curse you to Allah as you try to hit a target that will drop him into a vat of pig grease. However, in the true spirit of Separate But Equal, Don Imus and someone from NE Jackson will also sit in the dunking booth for an equal amount of time. Tom Head will give a reading for two hours on why he can't figure out who the hell he is. Cliff Cargill will give lessons with his .80 caliber desert eagle, using Frank Melton photos as targets. Tackleberry will be on hand for an autograph session. KIM Waaaaaade will be passing out free titles and deeds to crackhouses formerly owned by The Wood Street Players.

If you get tired come relax at the Fox News Tent. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both will entitle you to free drinks.Get your tickets now. Since this is an event for trolls, no ID is required, just bring the hate. Bring the family, Trollfest '07 is for EVERYONE!!!

This is definitely a Beaver production.

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