Bangkok--18 Sep--Standard & Poor's
Standard & Poor's Ratings Services has assigned its 'AA/A-1+' ratings to the City of Colorado Springs, Colo., $63 million variable-rate demand utilities system improvement revenue bonds series 2009C. The outlook is stable.
"We believe the 'AA' long-term rating reflects strong financial management; competitive rates in each of the four utility systems; a diverse mixture of resources in its electric system; and a stable regional economic base," said Standard & Poor's credit analyst Judith Waite.
The rating's short-term component reflects the likelihood of payment of tenders and a liquidity facility from the Bank of Nova Scotia N.A. (AA-/Stable/A-1+).
The city will use bond proceeds to refund all of its utilities system subordinate lien improvement revenue bonds, series 1999A, outstanding and fund the reserve fund.
The combined utilities provide electricity, gas, water and sewer to customers in Colorado Springs, Manitou Springs, and many 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. Despite the recession, each of the services experienced moderate growth in 2008. Electric customers numbered 208,737 meters; gas meters, 185,047; water meters, 132,637; and wastewater meters, 129,133.
The stable outlook reflects Standard & Poor's expectation of continued strong financial performance. The rating depends on the system maintaining strong coverage and liquidity levels. Colorado Springs Utilities is undertaking a substantial capital program in the next decade, with accompanying increased leverage. As such, adherence to management's financial projections, including its capital structure, debt service, and fixed cost 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
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
USPF Criteria: "Bank Liquidity Facilities," June 22, 2007
USPF Criteria: "Standby Bond Purchase Agreement Automatic Termination Events," April 11, 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:
Judith Waite, New York (1) 212-438-7677
Edward Ubiera, New York (1) 212 438 2034