Standard & Poor's revised the outlook on Madera Irrigation District, Calif.'s revenue bonds to stable from negative, citing improved finances.

The agency also affirmed the district's bond rating at A-minus.

"The outlook revision reflects the district's financial performance, which has improved consistently enough to generate improving coverage," said Standard & Poor's credit analyst Scott Garrigan.

The revision also reflects the district's upward trend in terms of its debt service coverage, as well as its consistent liquidity.

The A-minus rating is based on Standard & Poor's view of the district's customer base, dominated by agriculture, its consistently strong liquidity, and permanent water rights.

The rating also takes into account the area's high unemployment rates, which have ranged from 14.8% to 23.5% during the past three years, and adequate incomes.

The district is located in Madera County, 170 miles southeast of San Francisco and 240 miles north of Los Angeles. Its service area includes over 200 square miles and includes two-thirds of the city of Madera.

Standard & Poor's said the district's customer base is diverse, as the ten leading water users represent about 16.4% of total operating revenues and the leading customer, Madera Water District, pays less than 5% of total operating revenues annually.

"Liquidity has been strong during the past five fiscal years and we anticipate that it will likely remain strong in the future," analysts wrote in a report. "Unrestricted cash at the end of fiscal year 2012 totaled $16.7 million, equivalent to 456 days of operating expenses, which we consider strong."

Standard & Poor's said it could lower the rating if financial performance starts to deteriorate and become inconsistent again.

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