Bangkok--6 Aug--Standard & Poor's
Standard & Poor's Ratings Services has assigned its 'AA' long-term rating to City of Colorado Springs, Colo.'s utilities system revenue and refunding bonds, series 2009A, B, and D. The bonds will be fixed-rate and are secured by a pledge of net revenues of Colorado Springs Utilities' electric, gas, water, wastewater, and streetlight systems. Standard & Poor's also affirmed its 'AA' long-term and underlying ratings on Colorado Springs Utilities' parity debt outstanding. The outlook is stable. After the issuance of these bonds, outstanding debt will total $1.7 billion.
"We believe the 'AA' rating reflects strong financial management, competitive rates in each of its fourutility systems, and a stable regional economic base," said Standard & Poor's credit analyst Judith Waite.
The proceeds of 2009A will restructure series 2001A and 2003A bonds and, market conditions permitting, refund series 1998A bonds. Proceeds from 2009B will fund capital spending, and those of series D will finance a portion of the initial cost of a major water delivery system known as the Southern Delivery System (SDS).
Colorado Springs Utilities provides electricity, gas, water and sewer to customers in Colorado Springs, Manitou Springs, and many of the residential suburban areas around the city. The military installations of Fort Carson, Peterson Air Force Base, and the United States Air Force Academy receive water and electric service and gas supply and transportation, and Peterson Air Force Base also receives wastewater treatment service.
The stable outlook reflects Standard & Poor's expectation of continued strong financial performance. The rating and outlook depend on the system maintaining strong coverage and liquidity levels. Colorado Springs Utilities is undertaking a substantial capital plan in the next decade, with accompanying increased leverage. As such, adherence to management's financial projections, including its capital structure, debt service, and fixed charge coverage levels, along with rising, but manageable, user charge levels, is critical to maintaining the 'AA' rating.
RELATED RESEARCH
USPF Criteria: "Electric Utility Ratings," June 15, 2007
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:
Judith Waite, New York (1) 212-438-7677
Ian Carroll, San Francisco (1) 415-371-5060