1500 ET - Fitch downgrades certain Los Angeles Department of Water and Power debt, including $5.3 billion of water system revenue bonds, to AA- from AA, citing risks related to wildfire liability. "California's unique and rigid interpretation of inverse condemnation has been cited in litigation against the water system's operations," Fitch says. The firm notes that the empty Santa Ynez reservoir has been mentioned in litigation as a factor in delayed containment. "Precedent around similar litigation against water utilities is sparse and creates uncertainty around any potential liability LADWP may incur. However, Fitch believes that the prospective liability, together with the potential for increased operating or capital costs, could more readily be absorbed at the 'AA-' rating level." (josh.beckerman@wsj.com)
(END) Dow Jones Newswires
April 16, 2025 15:00 ET (19:00 GMT)
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