OREANDA-NEWS. S&P: Fulton County, GA Revenue Refunding Bonds Upgraded To 'AA' From 'AA-' On Very Strong Economic And Financial Metrics New York S&P Global Ratings raised its long-term rating on Fulton County, Ga.'s series 2011 and 2013 revenue refunding bonds to 'AA' from 'AA-'. The rating reflects our view of the combination of an extremely strong enterprise risk profile and a strong financial risk profile. The outlook is stable.

"The upgrade reflects what we view as the county's very strong economic and financial metrics," said S&P Global Ratings credit analyst Scott Winrow.

The upgrade also reflects the application of our revised criteria, "USPF Criteria: Rating Methodology And Assumptions For U. S. Municipal Waterworks And Sanitary Sewer Utility Revenue Bonds," published Jan. 19, 2016, on RatingsDirect. An extremely strong enterprise risk profile and a strong financial profile map to an indicative rating of 'aa-' in our revenue debt criteria matrix. We have applied a one-notch positive adjustment from the initial indicative rating to arrive at the final rating based on historical coverage metrics, liquidity levels, and economies of scale more in line with 'AA' rated credits.

The enterprise risk profile reflects our view of the system's:Service area participation in the broad and diverse Atlanta-Sandy Springs-Roswell metropolitan statistical area (MSA) 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 income levels; andGood operational management practices and policies. The financial risk profile reflects our view of the system's:Strong historical all-in debt service coverage (DSC) metrics that we believe the utility will continue to produce in the near term; Extremely strong liquidity position that we believe is sustainable in the near term, despite using cash to fund capital needs;Moderate debt-to-capitalization ratio of about 34% with additional debt plans in the future and potential pressure from county other postemployment benefit (OPEB) obligations; and Good financial management practices and policies. A first-lien pledge on net water and sewer system revenues secure the bonds. In addition, the utility funds a debt service reserve at a level of maximum annual debt service (MADS). The rate covenant requires 1.1x DSC, and the additional bonds test requires that net revenues provide at least 1.1x coverage of pro forma MADS.

We expect the outlook to remain stable over the two-year outlook period. We also expect the system to maintain all-in DSC at levels we consider generally strong and maintain extremely strong cash levels.

We could raise the rating if the system successfully manages its capital needs while increasing its coverage metrics and maintaining cash reserves at levels we consider extremely strong.