Bangkok--13 Aug--Standard & Poor's
Standard & Poor's Ratings Services assigned its 'A+' long-term rating, and stable outlook, to Colorado Water Resources and Power Development Authority's $9 million 2009A water resources revenue bonds, issued for the North Weld County Water District.
"The rating reflects what we view as the district's stable underlying economy, with good income levels; ample water rights relative to average demand; good financial performance; and very strong liquidity with more than two years' worth of operating expense in cash on hand," said Standard & Poor's credit analyst Timothy Barrett.
Factors tempering these strengths in our opinion are concentration in water revenues, with the top four customers accounting for 32.3% of water revenues; a reduction in tap fees by an expected 50% in fiscal 2009 due to less development and growth; and a relatively weak additional bonds test that allows for additional bonds as long as 12 months within the past 18 months, excluding connection fees, provide 1x maximum annual debt service (MADS) coverage.
"The stable outlook reflects our expectation that the district's customer base will remain stable with slow-to-moderate customer growth," Mr. Barrett added.
Further reflected in the outlook is Standard & Poor's expectation that the district will maintain sound financial performance, ensuring at least adequate debt service coverage and good system liquidity despite a potential slowdown in tap fees, while addressing its capital improvement plan.
The bonds are secured by net revenues of the district's water system. A debt service reserve funded in an amount equal to the MADS payment provides additional security. Bond proceeds will be used to finance increased capacity for both existing and future water demands.
With an estimated population of 35,000, the district encompasses about 324 square miles and provides water to the unincorporated portions of Weld and eastern Larimer Counties and the towns of Gill, Galeton, and Lucerne, Colo. In addition, the district provides water on a bulk basis to the towns of Ault, Eaton, Numm, Pierce, Severance, and Windsor, Colo.
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:
Timothy Barrett, New York (1) 212-438-6327
David G Hitchcock, New York (1) 212-438-2022