Fitch Ratings said it upgraded Panama City Beach, Fla.'s approximately $47.1 million in outstanding utility system revenue bonds, series 2009 and 2012 to AA from AA-minus.
The rating outlook is stable.
The bonds are secured by a senior pledge of the net revenues of the city's water and sewer system (the system), including legally available system development charges as well as public service tax (PST) revenues. The bonds are further secured by a cash-funded debt service reserve fund.
Debt levels have moderated and are expected to show continued improvement given the system's capital program calls for 100% pay-go for the foreseeable future.
Strong financial management has allowed the system to generate financial metrics that have historically outperformed the AA medians. Debt service coverage (DSC) is high even without supplementary revenues generated by the PST and liquidity remains ample.
