S&P Global Ratings has upgraded the San Diego County Water Authority’s senior lien credit rating to AAA, the San Diego County Water Authority said.
According to the agency’s news release, this is the first time the it has achieved a AAA senior lien rating, the highest offered by S&P.
“The upgrade reflects the authority’s successful integration of its increased storage capacity and desalinated water supply into its system while weathering one of the driest periods on record in the state without significant impact to its rates or debt burden,” S&P said in a statement.
According to the SDCWA, two other major ratings agencies also issued ratings for the San Diego County Water Authority. Moody’s gave the agency an Aa2 rating, and Fitch affirmed an AA+ rating.
Moody’s Investor Service affirmed its Aa2 rating for the agency’s senior lien debt, praising the water authority for being “vigilant” about charges and restrictions imposed by its largest supplier, the Metropolitan Water District of Southern California.
“Most recently, the Authority was awarded $188.3 million in damages plus interest by a San Francisco Superior Court judge for [MWD] water rates charged from 2011-2014 that violate the cost of service requirements under the state’s constitution,” said Moody’s credit opinion on May 24. “Importantly, the court ruled that MWD had been undercalculating the agency’s preferential rights to MWD water, significantly increasing the water authority’s statutory water rights by tens of thousands of acre-feet per year. While the decision is under appeal, it provides a strong example of the authority’s intent focus on supplies and charges.”
“When investors hear our story, they are impressed by 25 years of focused and successful efforts to vastly improve water supply reliability, actively manage our debt portfolio, provide predictable rates and invest in strategic capital improvements,” said Lisa Marie Harris, finance director for the San Diego County Water Authority. “We have strong debt coverage, healthy reserves and committed management — a recipe for continued success for years to come.”
