News release
Citing a very low operating cost burden and stable financial outlook, Fitch Ratings has affirmed the ratings on several Santa Clarita Valley Water Agency debt obligations for 2023. Specifically, the following ratings were affirmed:
- $73.5 million in certificates of participation at AA+.
- Approximately $78.4 million in series 2020A revenue bonds at AA.
- Approximately $154.7 million in taxable series 2020B revenue bonds at AA.
In addition, Fitch Ratings affirmed SCV Water’s Issuer Default Rating at AA. Following a comprehensive review, the independent credit rating agency concluded that SCV Water continues to have a strong capacity to pay its financial commitments and has a stable outlook for the future.
“The rating affirmation recognizes the agency’s commitment to fiscal sustainability as we continue to serve the unique needs of customers in the Santa Clarita Valley,” Gary Martin, president of the SCV Water board of directors, said in a prepared statement.
The ratings convey the agency’s capacity to absorb additional debt issuance as it implements the fiscal year 2023-27 capital improvement plan. Additionally, SCV Water will continue to secure the most favorable interest rates available for future debt financing needs.
Projects in the CIP will address pipeline repair and replacement, emergency storage, recycled water programs, as well as a large portion of spending for well treatment due to per- and polyfluoroalkyl substances (PFAS) contamination by constructing treatment facilities to restore water capacity.
The anticipated five-year CIP totals $684 million, which SCV Water expects to be funded by two Water Infrastructure Finance and Innovation Act loans through the Environmental Protection Agency, along with other debt, state and federal grants (about $41.4 million), low-interest loans, pay-as-you-go revenue from water rates, and recovery of costs from responsible parties in groundwater contamination litigation.
“The effort required to secure a favorable Fitch rating involves proactive financial management, adherence to best practices, and open communication with the rating agency to ensure a comprehensive evaluation of the agency’s creditworthiness,” Rochelle Patterson, SCV Water chief financial and administrative officer, said in the release. “Our high ratings mean stability and lower interest rates, which ultimately benefit our ratepayers.”
