Standard & Poor's Ratings Services said it has raised its rating on Healdsburg Public Financing Authority, Calif.'s wastewater revenue debt issued for Healdsburg to AA from AA-minus.
At the same time, Standard & Poor's assigned its AA rating to the city's series 2015A wastewater revenue refunding bonds. The outlook is stable.
"The upgrade reflects our opinion of the system's strong financial performance, with very strong liquidity and strong debt service coverage," said Standard & Poor's credit analyst Geoffrey Buswick. The agency expects this will be sustainable because the authority plans to fund any capital work as it goes in the next five years.
Bond proceeds will refund some series 2005D wastewater revenue bonds and advance refund the series 2006 bonds.
Healdsburg is 70 miles north of San Francisco, in the heart of Sonoma County's wine country. The wastewater system serves all of Healdsburg (4,748 customers as of fiscal 2014) and is primarily residential.
The stable outlook reflects the view that, over the next two years, DSC will remain strong and liquidity very strong given limited capital needs and lack of borrowing plans. The rating agency doesn't expect to raise the rating over the next two years, given the system's high rates and Healdsburg's moderate reliance on tourism, and because it doesn't expect financial metrics to materially improve. At the same time, it doesn't expect to lower the rating because the system's consistently strong financial metrics are sustainable.
