Standard & Poor’s last week raised its rating on the Huntsville Solid Waste Disposal Authority’s solid-waste revenue bonds to AA-plus from AA.
The agency said the outlook is stable.
The upgrade is due to improving debt-service coverage and liquidity, which has been driven by increasing waste-flow trends and revenue stability. The rating also reflects a strong and diverse economy, a stable long-term steam sales contract with the U.S. Army that accounts for more than 50% of the authority’s revenue, and sound financial operations with strong liquidity
The authority, created by the city of Huntsville, owns a waste-to-energy facility with a capacity of 690 tons per day.
Standard & Poor’s expressed concern about above-average tipping fees for the region, but those are mitigated by contracts with major haulers and statewide average disposal costs that have increased closer to the authority’s rate.
Financial operations have been strong, the agency said, with debt-service coverage more than 1.2 times over the past decade. The authority has cash on hand equal to 1,196 days and unrestricted cash and investments of $73.5 million.
The authority has $56 million of debt outstanding and future capital needs are limited, analysts said.
