Standard & Poor's Ratings Services said it has raised its underlying rating on Lafayette, La.'s senior-lien combined utility revenue bonds to AA-minus from A-plus, and its rating on the subordinate-lien communications system revenue bonds to A-plus from A.
At the same time, Standard & Poor's assigned its A-plus rating to Lafayette's series 2015 communications system revenue refunding bonds. The outlook is stable.
"The upgrade reflects our view of the utilities system's sustained strong fixed charge coverage and liquidity levels, and the communication system's improved cash flow," said Standard & Poor's credit analyst Peter Murphy.
The ratings reflects a pledge of Lafayette's Utilities System's (LUS) combined water, sewer, and electric systems, which secures both the senior-lien and communications system revenue bonds.
Communication system revenues also secure the related bonds, but the A-plus rating reflects only the LUS' subordinate-lien pledge to cover debt service obligations if net communication system revenues are insufficient. The subordinate lien results in a one-notch rating differential.
