Standard & Poor's Ratings Services said it has raised its underlying rating on Corsicana, Texas' waterworks and sewer system revenue debt to A from A-minus.
The outlook remains stable. The city's water and sewer net revenue pledge secures the bonds.
"The upgrade is based on the utility's improved senior-lien coverage and liquidity levels," said Standard & Poor's credit analyst James Breeding.
The rating reflects the utility's: adequate system capacity, both in terms of supply and treatment, stable customer base, and limited capital needs.
Coverage of senior-lien debt service is high and should remain at high levels; however, the system's obligations also include certificates of obligation issued by the city payable from system revenues. The result is lower, though still strong, all-in coverage levels.
The stable outlook reflects Standard & Poor's expectation for the utility's maintenance of strong coverage levels for both revenue bond debt and other system-supported obligations. Standard & Poor's expects capital needs to be limited to ongoing maintenance issues and to not negatively affect financial margins. The rating agency said it doesn't anticipate changing the rating within the two-year outlook horizon.