กรุงเทพฯ--17 มิ.ย.--S&P Global Ratings
SAN FRANCISCO (S&P Global Ratings) June 16, 2016--S&P Global Ratings raised its long-term rating and underlying rating (SPUR) to 'AA-' from 'A+' on El Dorado Irrigation District, Calif.'s revenue bonds and certificates of participation (COPs). At the same time, we assigned our 'AA-' long-term rating to the district's series 2016A refunding revenue bonds and series 2016B revenue COPs. We also affirmed the long-term component of the dual rating on the district's series 2008A adjustable-rate refunding revenue COPs (AA+/A-1). The 'A-1' short-term component of the dual rating remains unchanged. The outlook on the fixed-rate bond and COP ratings is stable.
"The raised rating reflects the application of our revised criteria, 'Rating Methodology And Assumptions For U.S. Municipal Waterworks And Sanitary Sewer Utility Revenue Bonds,' published Jan. 19, 2016, on RatingsDirect," said S&P Global Ratings credit analyst Tim Tung.
The 'AA-' long-term rating reflects, in our opinion, the combination of a very strong enterprise risk profile and a very strong financial risk profile.
The enterprise risk profile reflects our view of the district's:
Service area participation in the broad and diverse Sacramento-Roseville-Arden Arcade metropolitan statistical area, as demonstrated through the service area's strong household income metrics;
Very low industry risk as a monopolistic service provider of an essential public utility;Track record of recent rate increases driving strong operating revenues; andStrong operational management practices and policies.
The financial risk profile reflects our view of the district's: Strong all-in coverage metrics ranging from of 1.4x to 2.1x during the past four years (most recent year unaudited) although we anticipate coverage will decline to about 1.2x in the near term as annual debt service requirements rise in 2017; Very strong unrestricted cash balances totaling $55 million at the end of fiscal year 2015, equivalent to 456 days of operating expenses;
Moderate leverage position based on a debt-to-capitalization ratio of about 49% although the district's pension plan had a 66% funded ratio as of June 2014; and Good financial management practices and policies.
The series 2016A bonds are being issued to refund the district's existing series 2009A COPs, and the series 2016B COPs are being issued to finance a portion of the district's capital improvement plan.