Bangkok--23 Jul--Standard & Poor's
Standard & Poor's Ratings Services assigned its 'A' long-term rating, with a stable outlook, to Uintah Water Conservancy District, Utah's series 2009A water conservancy revenue bonds.
The rating is based on our opinion of the district's good coverage of existing and proposed debt service; local economy with sector concentration in agriculture and natural resources, including oil and gas; low liquidity in recent years; high debt to plant of 135% and plans to double the current amount of debt outstanding; and a history of large annual capital outlays for direct capital projects as well as in support of local irrigation customer's capital needs.
The bonds are special limited obligations of the district secured by a pledge of net revenues of the system. Except for the series 1999 and series 2004 revenue bonds currently outstanding, the district may not issue debt senior to the series 2009A bonds.
"We expect that, as reported by the district, future annual capital outlay will be more subdued, allowing the district to rebuild its reserves," said Standard & Poor's credit analyst Misty Newland.
The district is located in Uintah County in the northeastern area of the state. The district serves about 9,337 connections (through wholesale irrigation, municipal, and industrial water contracts in the Ashley Valley), including Vernal city, the county seat, and the city of Jensen. Although not coterminus with the county, the county is large by land size at 4,487 square miles, and its population totals just 30,000, reflecting the rural and land holdings dominated by the federal and state government (about 70%), with an additional 15% categorized as Native American. As part of the Uintah Basin, an area that also extends into Colorado and Wyoming, the county's economy has been driven by oil and gas extraction, with recent activity primarily focused on natural gas extraction.
RELATED RESEARCH
USPF Criteria: "Standard & Poor's Revises Criteria For Rating Water, Sewer, And Drainage Utility Revenue Bonds," Sept. 15, 2008
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Media Contact:
Ana Sandoval, New York (1) 212-438-5095, [email protected]
Analyst Contacts:
Misty Newland, San Francisco (1) 415-371-5073
Matthew Reining, San Francisco (1) 415-371-5044