The San Diego County Water Authority announced that the credit rating agency Standard & Poor's upgraded the Water Authority’s bond rating from its current level of "AA" to "AA+" on April 22. Credit ratings are one of the primary criteria used by investors in determining the rate of return that they will require when purchasing the Water Authority's debt. The upgrade comes as the Water Authority’s Board approved a negotiated sale today of up to $625 million in Water Revenue Certificates of Participation (COPs).
“We are in a tight financial market, where rating downgrades are common and upgrades are rare,” said Water Authority Board Chair Fern Steiner. “ The upgrade is a testament to the Water Authority’s strong management and sound financial planning as we pursue our mission of providing our region’s 3 million residents and $157 billion economy with a safe and reliable water supply."
Standard & Poor’s stated that a record of accomplishment of strong Board leadership and administrative and financial management, partnered with recently strengthened financial policies, were key factors that led to the rating upgrade. It further stated that the rating upgrade reflected the highly essential nature of the service provided, along with the large and diversified economic base of the Water Authority.
“Standard and Poor’s rating upgrade comes at a very advantageous time as we prepare to issue a large bond sale,” said Maureen Stapleton, Water Authority General Manager. “The San Vicente dam raise, the All-American Canal Lining Project and the Aqueduct Protection Program are among the major infrastructure projects to be financed through the bond sale that will help to ensure an efficient and reliable water supply delivery system.”
The Water Authority Board of Directors approved an updated calendar for its upcoming negotiated sale of Water Revenue COPs of up to $625 million. The proceeds of the bond sale will finance the Water Authority’s Capital Improvement Program and refund $63.165 million of the outstanding callable Water Revenue COPs, Series 1997A. The Water Authority has one of the largest capital improvement programs among California urban water agencies, with a $3.59 billion budget and a two-year appropriation for fiscal years 2008 and 2009 of $619 million.
The Water Authority’s "Aa3" and "AA" ratings from Moody's and Fitch, respectively, are considered high quality by all standards and are held by only a few select water agencies in California. Both Moody's and Fitch recognized the strong financial condition of the Water Authority.
Bank of America, Citigroup, Goldman Sachs, Lehman Brothers, and Merrill Lynch will underwrite the upcoming bond sale.
For more information about our upcoming bond sale go to http://www.sdcwa.org/about/pdf/2008A_OS_DISCLAIMER.pdf
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