S&P: Peachtree City Water & Sewer Authority, GA Issuer Credit Rating Raised To 'AA+' From 'AA-'
The rating reflects what we consider the combination of an extremely strong enterprise risk profile and a very strong financial risk profile.
"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, "Rating Methodology And Assumptions For U. S. Municipal Waterworks And Sanitary Sewer Utility Revenue Bonds," published Jan. 19, 2016, on RatingsDirect.
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 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:Extremely strong historical all-in coverage metrics that we believe the utility will continue to produce in the near term; Very strong liquidity position that we believe is sustainable in the near term, despite using cash to fund capital needs;Moderately high debt-to-capitalization ratio of about 58% with no additional debt plans in the future; and Good financial management practices and policies. The ICR reflects our opinion of the authority's overall financial capacity, or creditworthiness, to pay its financial obligations. The ICR does not apply to any specific financial obligations, nor does it take into account the nature and provisions of any potential future long-term debt.
We expect the outlook to remain stable over the two-year outlook period. We also expect the system to maintain all-in coverage at levels we consider generally very strong and maintain very strong cash levels.
While not likely, we could raise the rating if the system successfully manages its capital needs while increasing its cash reserves to levels we consider extremely strong.
We could lower the rating if cash reserves drop to levels we no longer consider very strong, coverage does not stay at levels we consider extremely strong, or the system significantly increases its debt burden without making adjustments to operating revenues.