Upper Trinity Regional Water District, TX Debt Rating Raised Three Notches To #A+# On Improved Credit Quality

Stocks and Financial Services Press Releases Friday January 20, 2017 08:55
DALLAS--20 Jan--S&P Global Ratings

DALLAS (S&P Global Ratings) Jan. 19, 2017--S&P Global Ratings raised its underlying rating (SPUR) on Upper Trinity Regional Water District, Texas' northeast regional water reclamation bonds three notches to 'A+' from 'BBB+'. The outlook is stable.

The rating action reflects S&P Global Ratings' opinion of the generally improved credit quality of the district's established customers, specifically Mustang Special Utility District, Celina, and Prosper (started sending flows in 2016). The rating action also reflects S&P Global Ratings' opinion of the system's credit fundamentals under the rating service's recently revised water sewer criteria.

The rating service bases the rating on the eight system participants' general creditworthiness and the system's ability to adjust rates on the participants at any time for any reason, effectively creating an unlimited step-up provision.

"We do not currently expect to change the rating further within our two-year outlook period. However, we could raise the rating if general credit quality were to improve due to the stronger-rated utilities," said S&P Global Ratings credit analyst Jose Razo. "We could lower the rating if the stronger-rated participants' financial risk profiles were to deteriorate due to higher operating and debt-related costs from wholesale providers."

The stable outlook reflects S&P Global Ratings' opinion of the district participants' credit quality, which will remain supportive of the rating. The rating service believes participants' strong credit characteristics, specifically their strong financial risk profiles, and access to the Dallas-Fort Worth metropolitan statistical area will likely maintain the outlook.

A first-lien net-wastewater system-revenue pledge, derived from payments to the district from contracted members, secures the bonds.

Certain terms used in this report, particularly certain adjectives used to express our view on rating relevant factors, have specific meanings ascribed to them in our criteria, and should therefore be read in conjunction with such criteria. Please see Ratings Criteria at www.standardandpoors.com for further information. Complete ratings information is available to subscribers of RatingsDirect at www.globalcreditportal.com and at www.spcapitaliq.com. All ratings affected by this rating action can be found on the S&P Global Ratings' public website at www.standardandpoors.com. Use the Ratings search box located in the left column.

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