Standard & Poor's Ratings Services said it has assigned its A-plus rating, with a stable outlook, to North Miami Beach's series 2012 utility system revenue refunding bonds, and raised its rating on the series 2002B bonds issued by the Florida Municipal Loan Council to A-plus from A.
These bonds are secured by payments from North Miami Beach; however, these will be entirely refunded with proceeds of the 2012 utility system bonds.
"The upgrade is based on the trend of improving debt service coverage levels," said Standard & Poor's credit analyst James Breeding.
The 2012 bonds are secured by net revenues of the city's water utility system.
The rating reflects the water system's: access to the Miami-Dade County economy, management's willingness to increase rates, which still remain competitive, strong debt service coverage, and capital program likely to be funded entirely with cash.
Offsetting factors include a history of only adequate liquidity that is pooled with other city funds, and a local economy demonstrating below-average income levels and above-average unemployment rates.
The stable outlook reflects that the North Miami Beach water system will continue to produce strong coverage levels and adequate liquidity levels. Additional upward rating mobility lies in the city continuing to maintain its strong financial metrics while successfully addressing its capital needs and not overleveraging its debt position.
