Standard & Poor's Ratings Services said it raised to BBB-plus from BBB its long-term ratings on North Texas Municipal Water District's (Sabine Creek) regional wastewater system revenue bonds and wastewater interceptor system revenue debt, issued for Royse City and Fate, Texas.
The outlook is stable.
"The upgrade is based on the improved financial health of Royse City's utility fund, as evidenced by continued good fixed-charge debt service coverage after transfers and continued improvement in liquidity to good levels in fiscal 2012, which we believe is sustainable," said Standard & Poor's credit analyst Scott Sagen.
Royse City is the largest participant of three projects financed by prior bond proceeds and the contract participant we view as the strong link based on unlimited step-up provisions. The three projects include the Sabine Creek Regional Wastewater System, the Sabine Creek Wastewater Interceptor System, and the Parker Creek Wastewater Interceptor System.
Royse City is responsible for roughly 59% of all debt service payments associated with Sabine Creek Regional Wastewater System while Fate is responsible for the remainder. Royse City is fully responsible for all debt service payments associated with Sabine Creek Wastewater Interceptor System. Royse City is also responsible for roughly 15% of all debt service payments associated with Parker Creek Wastewater Interceptor System while Fate is responsible for the remainder.
