News release
Citing the Santa Clarita Valley Water Agency’s sophisticated management and diversified water portfolio, as well as the ability to maintain strong debt service coverage and operating reserves, Standard & Poor’s has upgraded or affirmed the agency’s credit ratings at the AA+ level for a number of bonds and senior-lien certificates of participation, including:
- Raised the long-term rating to AA+ from AA on the Upper Santa Clara Valley Joint Power Authority’s 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,” Chief Financial and Administrative Officer Rochelle Patterson said in an SCV Water news release.
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.
