OREANDA-NEWS. S&P Global Ratings assigned its 'AA' long-term rating to Contra Costa Water District, Calif.'s series E water revenue refunding notes, issued on the district's mezzanine lien. At the same time, we affirmed our 'AA+' long-term rating and underlying rating (SPUR) on the district's and Contra Costa Water Authority's senior-lien bonds, our 'AA' long-term rating on the district's mezzanine-lien notes, and our 'A-1+' short-term rating on the district's commercial paper (CP) notes. The outlook, where applicable, is stable.

"The long-term ratings reflect, in our opinion, the combination of a very strong enterprise risk profile and a very strong financial risk profile," said S&P Global Ratings credit analyst Tim Tung.

The enterprise risk profile reflects our view of the district'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 in the context of the service area's very strong income levels; andStrong operational management practices and policies. The financial risk profile reflects our view of the district's:

Strong all-in coverage metrics that we anticipate will temporarily weaken in the near term as the district implements rate increases to offset the impacts of rising supply costs;Exceptionally strong liquidity position that is supported by an adopted reserve policy;Capital improvement plan that contemplates only a very modest amount of additional leverage; and Strong financial management practices and policies. A very strong enterprise risk profile and a very strong financial risk profile map to an indicative rating in our revenue debt criteria matrix of 'aa/aa-'. We have selected the 'aa' anchor and also applied a one-notch positive adjustment from the initial indicative rating to arrive at the final rating based on the strength of the district's service area economy and liquidity position relative to peers'.

The series E mezzanine-lien notes are being issued to refund the series B notes maturing on Oct. 1, 2016.