Bangkok--3 May--Standard & Poor's
Standard & Poor's Ratings Services has raised its rating on Wenatchee, Wash.'s water and sewer revenue and refunding bonds outstanding to 'AA' from 'AA-'. At the same time, Standard & Poor's assigned its 'AA' rating to the city's water and sewer revenue and refunding bonds, series 2011. The outlook is stable.
"The upgrade reflects our view of strong financial metrics that we expect the utility to preserve through adopted rate increases, limited capital needs, and competitive rates," said Standard & Poor's credit analyst Jeffrey Panger.
The ratings reflect our view of solid historical coverage of the combined system's pro forma senior- and junior-lien maximum annual debt service, strong liquidity, adequate water and sewer capacity and limited capital needs; and competitive rates.
A senior lien net revenue pledge of Wenatchee's water, sewer, and storm drainage systems secures the bonds, which the city is issuing to fund capital improvements to the sewer and storm drainage systems and refund debt outstanding. This will enable the consolidation of the water and sewer system with the storm drainage system.
The City of Wenatchee (population 31,120) is in central Washington's Chelan County, 138 miles west of Seattle and 165 east of Spokane. The city is the urban center for a largely agricultural area, but there is a degree of manufacturing, health care, and tourism to the economy as well. Wenatchee's water system services most of the area within the city boundaries. In addition, it operates a regional water system that supplies ground water to the city water distribution system, Chelan Public Utility District No. 1, and East Wenatchee Water District. The regional water supply system, which draws from the East Bank aquifer, has the capacity to deliver 23.5 million gallons of water per day (mgd), well above the 10 mgd average daily demand and 19 mgd peak demand in 2010.
The stable outlook reflects our expectation that approved rate increases and reserves will maintain solid debt service coverage. The outlook also reflects our expectation that Wenatchee will maintain these levels and liquidity as it issues debt.
RELATED CRITERIA AND RESEARCH
USPF Criteria: Key Water And Sewer Utility Credit Ratio Ranges, Sept. 15, 2008
USPF Criteria: Standard & Poor's Revises Criteria For Rating Water, Sewer, And Drainage Utility Revenue Bonds, Sept. 15, 2008
Complete ratings information is available to subscribers of RatingsDirect on the Global Credit Portal at www.globalcreditportal.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com. Use the Ratings search box located in the left column.
Media Contact:
Edward Sweeney, New York (1) 212.438.6634,
[email protected]
Analyst Contacts:
Jeffrey Panger, New York (1) 212-438-2076
Robert Hannay, San Francisco