S&P Global Ratings recently upgraded San Antonio Water System’s junior lien credit rating from AA to AA+, while Fitch Ratings revised its Rating Outlook to Positive from Stable.
S&P cited the utility’s “robust historical financial performance… and strong liquidity balances” as support for the ratings upgrade. S&P also recognized SAWS’ efforts to diversify its water portfolio, noting its significant reserves of underground storage of Edwards Aquifer water at the Aquifer Storage and Recovery site in southern Bexar County.
In revising its Rating Outlook from Stable to Positive, Fitch cited “projections that point to leverage sustained just under 7.0x through the forward look”. They also noted that SAWS “has successfully expanded and diversified its supply portfolio during the last decade and is at the tail end of completing its regulatory capital program”.
“High credit ratings are a benefit to SAWS customers, as they will result in lower interest rates when SAWS issues revenue bonds to fund the necessary capital improvement projects to ensure safe, reliable drinking water and wastewater services to our community,” said Doug Evanson, SAWS Senior Vice President & Chief Financial Officer. “The upgrade helps us minimize rate increases going forward.”
SAWS Board of Trustees Vice Chairman David McGee commended Evanson and his team for a job well done at the September board meeting.
“It is absolutely no small accomplishment to have your debt rating upgraded,” he said. “That is the sign of an incredibly well-run organization. Rating agencies are tough – they see everything, and they compare us to everyone. For us to have gone through [the last few years] and still help our community the way we’ve been able to do, that’s incredible.”
SAWS is planning to issue junior lien bonds Sept. 27 to fund a portion of both 2022 and 2023 capital improvement programs.
“These programs consist primarily of improvements to SAWS water and wastewater infrastructure, including main replacements, production system upgrades and treatment system improvements,” Evanson said. “SAWS has been doing very well financially for a number of years, and we’re pleased to see that being recognized.