Fitch Ratings said it upgraded to AA-plus from AA Renton, Wash.'s approximately $33 million water and sewer system revenue bonds, series 2008A, 2008B, 2007, 2004, and 2002; and approximately $1.9 million water and sewer system refunding revenue bonds, series 2003, and 1998.
The rating outlook is stable.
The bonds are secured by a first lien on net revenues of the water, sewer and storm system (the system) after payment of operation and maintenance expenses.
The upgrade reflects the system's strong cash flow as a result of recent large rate increases in 2011 and 2012, high debt service coverage (DSC) levels of over 3.0 times (x), adequate liquidity of about 180 days and very low debt burden.
Strengthening of the city's financial policies in 2010 have resulted in an increase in revenues and debt service coverage in fiscal 2011 that is expected to continue, providing additional credit strength for bondholders.
Debt levels of under $400 per capita are low and fall well under AA-plus median levels and amortization is rapid. Capital needs are manageable, and there are no additional debt issuances planned in the next five years.
