NEW YORK - Standard & Poor's Ratings Services said it has raised its long-term and underlying ratings on Laguna Madre Water District (LMWD or the district), Texas' general obligation (GO) debt to A-plus from A. The outlook is stable.
"The upgrade reflects our view of LMWD's steady property tax-base expansion, coupled with a low debt burden and limited capital needs," said Standard & Poor's credit analyst Kurt Forsgren.
In addition, the rating reflects the district's steady customer base growth and historically healthy financial position.
LMWD provides service to about 6,100 water and sewer customers in Cameron County, 25 miles northeast of Brownsville, Texas. South Padre Island, Texas, a tourist haven near the border of Mexico, accounts for 75% of the district's assessed value.
LMWD's customer base has increased 13%, to 6,100 customers in 2009 from 5,400 in fiscal 2006. The district, which has an estimated population of about 21,350, experiences a fivefold increase in its population during the tourist season.
The tourist population has driven growth among South Padre Island's commercial resort property and residential homes.
The stable outlook reflects LMWD's sustained property tax base expansion will continue to provide management with ample revenue flexibility to meet its capital needs and that the district's strong operational performance will continue.
