Standard & Poor’s Thursday raised its underlying rating on Conroe, Tex.s’ water and sewer system revenue debt two notches to AA-minus from A based on the system’s good financial performance, as evidenced by strong liquidity and debt service coverage. The outlook is stable.
The rating agency also assigned its AA-minus standard long-term rating, and stable outlook, to the city’s $10.05 million of Series 2008 water and sewer system revenue bonds.
The ratings also reflect the system’s sound, growing service area economy with access to economic opportunities within the Houston metropolitan statistical area, growing customer base and more-than-adequate capacity to meet demand, and below-average water and sewer rates and plans for annual rate increases.
The system’s need for additional debt to fund the capital plan to meet growing service area demand mitigates these factors.
The rating action affects roughly $16.4 million of debt outstanding.