LOS ANGELES — Moody's placed Merced County Regional Waste Management Authority, Calif.'s bottom-rung investment rating on review for upgrade.
If Moody's upgrades the authority's Baa3 rating following a 90-day review, it would affect roughly $26 million in outstanding debt.
The potential upgrade comes as part of Moody's revised methodology for municipal utility revenue debt adopted Dec. 15, which puts upward pressure on this rating, according to analysts.
"In the updated methodology, Moody's has introduced a quantitative and qualitative scorecard that refines our approach to rating municipal utilities, including solid waste enterprises," analysts said. "The methodology applies to six categories of municipal utilities: water distribution, gas distribution, electric distribution, sanitary sewerage, stormwater disposal, and solid waste disposal."
The size and health of the system and its service area, the financial strength of its operations, the legal provisions governing its management, and the strength of its rate management and regulatory are the primary factors Moody's considers in rating credits in this sector, according to the report.
With the updated methodology, Moody's said it is introducing a scorecard that assigns explicit weights and values to the factors Moody's considers most important in utility revenue bond analysis.
Moody's has a stable outlook on the Merced authority.
