PHOENIX - Standard & Poor's upgraded Salinas, Calif.'s sanitary sewer system revenue bonds to AA-minus from A-plus.
"The raised rating reflects our view of the sewer system's improved debt service coverage and liquidity levels in fiscal years 2013 and 2014," S&P credit analyst Tim Tung announced Aug. 28.
Salinas, which styles itself "The Salad Bowl of the World," is a city of more than 150,000 and the seat of Monterey County on California's central coast. As its nickname suggests, the city's economy is based on a strong agriculture foundation as well as emerging wine and tech industries.
Salinas issued $18 million of the sewer system bonds in 2012, part of which was used to refund debt issued in 1998. In upgrading the bonds, the agency said the city had liquid assets equivalent to 861 days of operating expenses at fiscal-year-end 2014. The sewer system has implemented a 4% rate increase in fiscal year 2016 and has approved a 4% rate increase scheduled for fiscal year 2017.
The bonds were not rated by any other agency.
This upgrade comes roughly six months after S&P upgraded Salinas' implied general obligation rating, citing the city's "improved finances."
