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Fitch Ratings lowered the outlook to negative from stable on DeKalb County, Georgia’s water and sewer revenue bonds Friday but affirmed its AA-minus rating.

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Fitch said the negative outlook “reflects Fitch’s expectation that leverage, measured as net adjusted debt to adjusted funds available for debt service, could remain elevated as the system works through a capital-intensive period.” 

The system’s leverage was 10.8 times in Dec. 31, 2024. Under a Fitch stress scenario, leverage would increase to 13.1 times in fiscal 2027 and then decline to 12.7 times through fiscal 2029. The water and sewer system expects to issue more than $2 billion in debt through fiscal 2030.

“The system has recently begun implementing significant rate increases and is conducting its biennial capital improvement plan review, with expected approval in September 2026,” Fitch said. Any expansion in capital spending plans would require rate increases for the system to maintain its rating, Fitch said.  

The system had about $1.28 billion in bond debt outstanding this spring, according to S&P Global Ratings. 

The system’s debt benefits from a service area characterized by midrange income level and a moderate unemployment rate, Fitch said.

The system also benefits from a very low operating cost burden, the rating agency said. 

DeKalb County, with about 774,000 residents, encompasses a small part of Atlanta and much of its east and north suburbs.

S&P rates the county’s water and sewer bonds AA-minus with a negative outlook. 

DeKalb County government didn’t immediately respond to a request for a comment.