Bangkok--30 Jul--Standard & Poor's
Standard & Poor's Ratings Services raised its underlying rating (SPUR) on San Patricio Municipal Water District, Texas' existing water revenue debt to 'A' from 'BBB+' based on the improved credit quality of the customer cities to which the district sells water. At the same time, Standard & Poor's assigned its 'A' long-term rating, and stable outlook, to the district's series 2009 water revenue bonds.
The ratings reflect the district's mostly wholesale customer base, which is concentrated in the industrial and manufacturing sectors; and adequate debt service coverage.
Factors that provide rating stability include the district's long-term water supply contract with Corpus Christi, Texas; two new large electric utility customers, each with 20-year contracts; and adequate financial operations with strong liquidity levels.
The series 2009 water revenue bonds are secured by a first and prior lien on and pledge of the net revenues of the system. Bond proceeds will be used to replace an 18-mile water line, and to expand a treatment facility.
"We expect that the district will maintain strong liquidity to offset modest coverage levels," said Standard & Poor's credit analyst Kate Choban.
San Patricio Municipal Water District is located in San Patricio County and benefits economically from its access to Corpus Christi, Texas. The district obtains its water from the city of Corpus Christi through a potable water contract and a raw water contract, and provides potable water to nine member cities.
RELATED RESEARCH
USPF Criteria: "Key Water And Sewer Utility Credit Ratio Ranges," 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:
Kate Choban, Dallas (1) 214-871-1420
Theodore Chapman, Dallas (1) 214-871-1401