Bangkok--14 Jul--Standard & Poor's
Standard & Poor's Ratings Services has raised its ratings on Colorado Water Resource and Power Development Authority's junior-lien bonds to 'AA+' from 'AA', based on strong coverage from cash flows. The outlook is stable.
At the same time, the rating service assigned its 'AA+' long-term rating to the authority's $42.09 million drinking water revolving fund refunding bonds series 2010A. The outlook is stable.
The rating reflects what Standard & Poor's views as:
The subordinate lien's currently good coverage by cash flow streams that can withstand its default tolerance tests in at least the 'AA' category;
The likelihood of additional future bonding at the senior level coupled with no debt service reserve;
A mechanism that financially links the authority's drinking water and water pollution control loans; and
The stable credit quality of the borrowers.
"We expect that the cash flow generated from the loan portfolio will sufficiently meet minimal program requirements for an 'AA+' rating on the subordinate revenue bonds," said Standard & Poor's credit analyst Lisa Schroeer. "In addition, continued strong program management and stable credit quality of the borrowers are reflected in the stable outlook," she added.
A subordinate pledge of the authority's respective clean water and drinking water loan program annual revenues, after payment of prior-lien clean water bonds and drinking water bonds, secures the authority's refunding revolving fund bonds. Excess revenues from pledged wastewater loans pay first senior and then subordinate wastewater revenue bond debt service, before being available to pay subordinate drinking water bonds, while excess drinking water loan revenues pay first senior and then subordinate drinking water debt service, before being available for subordinate wastewater bond debt service on a cross-collateralized basis.
The refundings will accomplish present value savings, and it is the authority's current intention to reserve issuance of subordinate-lien debt only for refunding purposes.
RELATED CRITERIA AND RESEARCH
USPF Criteria: Long-Term Municipal Pools, Oct. 19, 2006
Complete ratings information is available to RatingsDirect on the Global Credit Portal subscribers at www.globalcreditportal.com and 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. Use the Ratings search box located in the left column.
Media Contact:
Ana Sandoval, New York (1) 212-438-5095,
[email protected]
Analyst Contacts:
Lisa Schroeer, Charlottesville (1) 434-220-0892
David G Hitchcock, New York (1) 212-438-2022
Key Contacts:
Americas Media Relations: (1) 212-438-6667
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[email protected]
Americas Customer Service: (1) 212-438-7280
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