Standard & Poor's Ratings Services said it raised its rating on Winter Haven, Fla.'s utility revenue debt one notch to AA-minus from A-plus.
The outlook is stable.
The upgrade reflects Standard & Poor's opinion of the system's continued strong financial performance, evidenced by the maintenance of strong liquidity and strong debt service coverage, net of transfers into the general fund. Due to the system's lack of additional debt plans and willingness to implement rate increases, Standard & Poor's believes financial performance is sustainable.
"We believe the system will likely continue to adjust rates annually to maintain, what we consider, strong liquidity and debt service coverage after transfers. We also believe the residential and diverse customer base, ample treatment capacity, and limited debt needs support the system's stability," said Standard & Poor's credit analyst Scott Sagen. "Due to, what we consider, the system's below-average income and high leverage, we do not expect to raise the rating during the two-year outlook period. Beyond the outlook's two-year period, however, we could lower the rating if financial metrics were to weaken materially due to sizable general fund transfers."
The water and sewer system's net revenue pledge secures the series 2005 bonds.
