City's Water and Sewer Bonds Earn AA+ Rating from S&P and Aa1 Rating from Moody’s
Standard & Poor’s Assigns AA+ Rating to City’s Water & Sewer Bonds
Standard & Poor's (S&P) Ratings Services has assigned its AA+ rating to the City of Fort Lauderdale's 2016 water and sewer system revenue and revenue refunding bonds. At the same time, Standard & Poor's affirmed its AA+ rating on the system's revenue-secured bonds outstanding.
The AA+ rating from S&P reflects “a strong service area economy, low industry risk, strong market position, and very strong operational management assessment.” In its evaluation, S&P noted the Fort Lauderdale water and sewer system’s “very strong liquidity and reserve position, adequate debt and liabilities position, and very strong financial management assessment.”
S&P’s AA+ rating comes on the heels of the City receiving an Aa1 rating from Moody’s Investors Service (see below). On the City’s liquidity position S&P commented,
“In our view, liquidity remained very strong at the close of fiscal 2014 with approximately $96.2 million in unrestricted cash, which equals a strong, in our opinion, 423 days' cash on hand…The city is projecting liquidity to increase by fiscal 2017. Even while management is intending to use a portion of its unrestricted cash to fund capital projects on a pay-as-you-go basis, it expects to maintain liquidity well above its 90-day reserve policy.”
>> Read the complete report from Standard & Poor's Ratings Services .
Moody’s assigns Aa1 to Fort Lauderdale's Water & Sewer Bonds
Moody's Investors Service has assigned a rating of Aa1 to Fort Lauderdale's sale of $164.7 million Water and Sewer Revenue Refunding Bonds. Concurrently, Moody's has affirmed the Aa1 rating on $233.6 million outstanding parity bonds.
The Aa1 rating reflects the strength of a well-managed system supported by a strong liquidity position and competitive rate structure, a sound capital improvement program, and sufficient water supply and system treatment capacities to at least 2035.
Moody's lauded the City for the strong financial liquidity of its water and sewer system:
"The system's liquidity position is strong, with unrestricted cash and investments of $96.2 million in relation to operating expenses of $78.4 million yielding 448 days cash on hand in fiscal 2014. Operating expenses include payments from the system to the city's general fund, which are equal to 3% of the prior year's net fixed assets. The fiscal 2014 payment totaled $17.9 million, and despite a slight increase in the fiscal 2015 payment ($19.1 million), liquidity is expected to remain healthy given the system's ability to effectively manage expenses and capital spending."
>> Read the complete report from Moody's Investors Service .