Moody's Puts A1 on Los Angeles Solid Waste Bonds

Date: August 31, 2006

Source: Moody's Investor Service

Moody's investor service recently assigned an A1 rating to the City of Los Angeles Solid Waste Resources Revenue Bonds, Series 2006-A. The A1 rating affirms Moody's confidence in the city's relatively strong position given its broad and highly stable customer base. As is the case throughout the industry, the City has already given notice of plans to raise its albeit modest rates rather significantly over the next three years. However, the proceeds are only projected to cover some 65% of expenses by 2010, at which time, the City will have to draw upon general funds. The City's recently revised "Integrated Resources Plan" for solid waste management details increased expenses arising out of reduced reliance on the city's main landfill, Puente Hills, ambitious recycling targets, and capital projects and equipment purchases over the next five years that could total $731 million, double current outstanding debt.

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