Standard & Poor's Ratings Services said it raised to A-minus from BBB-plus its long-term rating on Florida Governmental Utilities Authority's (FGUA) series 2010 utility revenue refunding bonds, issued for Lindrick Utility System's project.

The outlook is stable.

"The upgrade is based on the system's good financial performance following annual rate increases, which have generated good debt service coverage and increased liquidity to good levels," said Standard & Poor's credit analyst Scott Sagen.

The rating also reflects the acquired utility's plans to adjust rates, which will help maintain good financial metrics.

These strengths are somewhat offset, in part, by the system's: high water and sewer combined monthly rates due to the rapid annual rate increases necessary to fund the system's acquisition and capital improvements, which limit revenue-raising flexibility; weakness in the service area economy, with high unemployment and below-average income levels; and highly leveraged system due to the recent debt funding of its acquisition.

In fiscal 2010, the authority acquired the Lindrick System, a private utility that serves an area south of New Port Richey in Pasco County.

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