AA+ Rating Reflects Stable Long-Term Financial Outlook
SANTA CLARITA – Citing SCV Water’s sophisticated management and diversified water portfolio, as well as the ability to maintain strong debt service coverage and operating reserves, Standard & Poor’s (S&P) has upgraded or affirmed the Agency’s credit ratings at the AA+ level for a number of bonds and senior-lien certificates of participation (COPs), including:
• Raised the long-term rating to AA+ from AA on the Upper Santa Clara Valley Joint Power Authority’s (USCVJPA) subordinate-lien revenue bonds, which are issued for SCV Water
• Assigned a AA+ long-term rating to the USCVJPA’s anticipated $63.7 million series 2023 subordinate-lien revenue bonds
• Affirmed a AA+ rating on SCV Water’s existing senior-lien COPs, as well as parity subordinate-lien COPs
Following its comprehensive review of SCV Water’s finances, S&P Global Ratings found that the Agency’s operating revenues that are available for junior-lien payments are “very strong,” leading the firm to upgrade the rating for the associated bonds on the determination that S&P “no longer believe[s] junior-lien bondholders are materially disadvantaged relative to senior-lien bondholders.”
“Achieving a AA+ credit rating across the board recognizes SCV Water’s strong financial footing and ability to pay debt,” said Chief Financial and Administrative Officer Rochelle Patterson. S&P assigns ratings to companies using letter grades to communicate to investors how likely a borrower is to repay its debt. A rating of AA+ indicates the institution is financially strong and that associated investments have a very low chance of default. “These ratings will enable the Agency to secure lower interest rates when financing capital improvement projects, which is a benefit to ratepayers as well,” added Patterson.