In the late 1990s and early 2000s, U.S. states passed a number of flow control and environmental laws that created demand in the municipal solid waste sector for new facilities or updates to existing facilities to comply with the new standards. The result was a high volume of municipal bond issuance to finance these projects. Since then, project activity for U.S. municipal solid waste systems has slowed, and municipal bond issuance for the sector has abated in turn.

Currently, Standard & Poor's Ratings Services maintains ratings on municipal bonds from 53 solid waste systems in the U.S., all of which are investment-grade and within the AA and A categories.

In a report published Monday, titled "Assessing U.S. Municipal Solid Waste Systems' Credit Quality Means Looking Beyond The Numbers," Standard & Poor's discusses credit quality for U.S. solid waste systems, which derives in large part from several key financial metrics, chief among them liquidity and debt service coverage. The report notes that although these two metrics have a strong bearing on the ratings we assign, qualitative factors also influence S&P's credit assessments of these systems.

"When assigning a bond rating, we take into account a multitude of factors, both qualitative and quantitative," said Standard & Poor's credit analyst Corey Friedman. "We believe a thorough examination of the quantitative information sheds light on an individual issuer's strengths and weaknesses relative to its peers'," he added.

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