Standard & Poor's Ratings Services said it has raised its rating on Oklahoma City Environmental Assistance Trust's (OCEAT) solid waste management revenue bonds to AAA from AA-plus.
The outlook is stable.
"The upgrade reflects the utility's very strong debt service coverage and cash levels, that, given the lack of additional debt plans, should remain near currently high levels," said Standard & Poor's credit analyst James Breeding.
The rating also reflects the utility's: diverse regional service area economy and customer base; stable revenue stream, which is primarily generated by residential solid waste collection fees that are included in monthly water and sewer utility bills; and history of annual modest rate increases and competitive rates.
The bonds are secured by the net operating revenues of the city's solid waste collection and disposal system. A debt service reserve, funded at the lesser of 10% of bond proceeds, maximum annual debt service, or 1.25x average annual debt service provides additional bond holder security.
The stable outlook reflects the stable customer base and expectation that the city will continue to adopt rate increases as necessary to maintain strong future debt service coverage. The agency doesn't expect to change the rating within the next two years.
