Standard & Poor's Ratings Services said it has raised its rating on Bethesda Water Supply Corp., Texas' revenue debt to AA-minus from A-plus.

The outlook is stable.

"The upgrade reflects our view of a water district with strong financial metrics and limited capital needs," said Standard & Poor's credit analyst Anita Pancholy.

More specifically the rating reflects the company's: very strong liquidity, coupled with healthy debt service coverage (DSC); limited capital needs; and contract with Fort Worth for competitively priced treated water.

A limited and rural service area economy constrains the rating.

Bethesda Water serves an estimated population of 25,000 near Burleson, Texas, about 15 miles south of downtown Fort Worth. Both the company's own wells and Fort Worth's (senior-lien water and sewer revenue bond rating: AA/stable) supply serve the mostly residential customer base. The service area is mainly rural and suburban, and median household effective buying income is considered good at 107% of national averages.

The stable outlook reflects the expectation that Bethesda Water will maintain a stable and strong financial risk profile, including healthy DSC and sound liquidity.

The outlook also reflects the assessment of the service area's limited capital needs and expectation that the company's rate adjustment flexibility and operational strengths from the contract with Fort Worth will allow long-term capital requirements to remain manageable.

S&P does not expect to raise or lower the rating in the two-year outlook period.

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