OREANDA-NEWS. S&P Global Ratings assigned its 'AA+' long-term rating to Union Sanitary District, Calif.'s series 2016 wastewater revenue refunding bonds. The outlook is stable.

"The rating reflects, in our opinion, the combination of an extremely strong enterprise risk profile and an extremely strong financial risk profile," said S&P Global Ratings credit analyst Tim Tung.

The enterprise risk profile reflects our view of the wastewater system's:

Service area participation in the broad and diverse San Francisco-Oakland-Hayward metropolitan area economy;Very low industry risk as a monopolistic service provider of an essential public utility;Affordable service rates that provide management with revenue-raising flexibility; andGood operational management practices and policies although we believe that more stringent regulatory requirements in the medium term could pressure the system's credit profile. The financial risk profile reflects our view of the wastewater system's:

Extremely strong all-in coverage metrics that we anticipate will continue for at least the near term; Very strong liquidity position that we believe will be maintained based on the district's adopted reserve policy;Capital improvement plan that is manageable, but does not yet incorporate potentially significant capital projects to address a likely regulatory change although precise timing remains uncertain; and Strong financial management practices and policies. An extremely strong enterprise risk profile and an extremely strong financial risk profile map to an indicative rating in our revenue debt criteria matrix of 'aaa'; however, we have applied a one-notch unfavorable adjustment from the initial indicative rating to arrive at the final rating based primarily on the risk that regulatory requirements are likely to become more stringent in the medium term and this could lead to significant additional capital needs.

The district is issuing the series 2016 bonds to refund all of its existing debt for annual debt service savings.