Standard & Poor's Ratings Services said it raised its rating one notch to AA from AA-minus on Longview, Texas' waterworks and sewer system revenue bonds.
At the same time, it assigned a AA rating to the city's series 2015 waterworks and sewer system revenue refunding bonds. The outlook is stable.
"The upgrade is based on our view that the steady trend of strong and improving financial performance is sustainable given the system's modest capital requirements, which will will most likely be funded with internally generated sources," said Standard & Poor's credit analyst Theodore Chapman.
Furthermore, annual debt service payments decline each year through the final maturity in 2029. Therefore, should the city's funding sources change and debt become a larger part of the plan, management has the ability to layer it on in a manner that is unlikely to harm financial metrics.
The bonds are secured by a first-lien pledge of the water and sewer system's net revenues. Proceeds will be used to refund certain maturities of the series 2004A, 2005, and 2010A revenue bonds. A fully-funded debt service reserve in the amount of average annual debt service provides additional liquidity.
Longview, with a population of roughly 83,000, is located 125 miles east of Dallas and serves as the economic engine for a three-county area.
