Bangkok--28 Jul--Standard & Poor's
Standard & Poor's Ratings Services has assigned its 'AAA' long-term rating to Orange County Water District (OCWD or the district), Calif.'s $131.6 million revenue refunding certificates of participation (COPs), series 2009A. At the same time, Standard & Poor's affirmed its 'AAA' rating on approximately $228.5 million of parity debt outstanding. The outlook is stable.
"In our view, the ratings reflect a broad and diverse service area economy with high income levels; very strong coverage of debt service and exceptionally high liquidity; a very competitive business position; and modest debt needs," said Standard & Poor's credit analyst David Hitchcock.
The proceeds of the 2009A COPs will refund the district's variable-rate series 2008A COPs.
OCWD manages the Orange County Groundwater Basin, a natural aquifer underlying a 350-square-mile area in the northern half of Orange County (AA-/Stable/--) covering more than 2.3 million people. In our view, the county's economy is diverse, and its median effective buying income was very strong at 140.5% of the U.S.'s level. Water utilities served include the cities of Anaheim, Santa Ana, Orange, Huntington Beach, Tustin, Westminster, Fullerton, and Fountain Valley: In total, there are 19 municipal groundwater producers and 110 private producers.
The stable outlook reflects our expectation that OCWD groundwater assessments will remain significantly cheaper than those of competing imported water. The outlook also reflects our expectation that the district will continue to impose assessment rates that will support strong debt service coverage by net revenues and a strong cash position, even with potential new debt to fund the GWR expansion and potential one-time shifts of local property tax to school districts.
RELATED 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 RatingsDirect subscribers at www.ratingsdirect.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com; select your preferred country or region, then Ratings in the left navigation bar, followed by Find a Rating.
Media Contact:
Ana Sandoval, New York (1) 212-438-5095, [email protected]
Analyst Contacts:
David G Hitchcock, New York (1) 212-438-2022
Ian Carroll, San Francisco (1) 415-371-5060