S&P: Portland, OR First-Lien Sewer System Bonds Assigned 'AA' Rating; Second-Lien Sewer System Bonds Rated 'AA-'
"The 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 system's:
Service area participation in the broad and diverse Portland-Vancouver-Hillsboro metropolitan area economy;Very low industry risk as a monopolistic service provider of an essential public utility;Strong market position based on affordable service rates although weakened somewhat by the county's elevated poverty rate; andStrong operational management practices and policies. The financial risk profile reflects our view of the system's:
All-in coverage metrics that have improved to strong levels from previously adequate levels; Liquidity position that has also strengthened as surplus revenues have boosted reserve levels during recent fiscal years;Adequate leverage position based on a debt-to-capitalization ratio of 54% with additional leverage plans within the next five years to fund the system's $545 million capital improvement program; and Strong financial management practices and policies. The bonds are being issued to refund a portion of the system's existing obligations for annual debt service savings.