The rating on El Paso, Texas' notes reflects the water and sewer system's long-term creditworthiness (senior rating 'AA') and additional liquidity provided by a revolving credit agreement with Bank of America NT&SA. The termination date is Sept. 30, 1999. As of Aug. 31, 1999, $20 million of commercial paper was outstanding. The system's 'AA' rating reflects healthy customer base growth, a strong internal debt service coverage target, and rates that provide flexibility for increases necessitated by a large capital program. A higher rating is precluded by a large, $225 million capital improvement program that is expected to be funded 55% from debt and 45% from cash-on-hand and other revenues. El Paso provides water and sewer service to a population of
