Pierce County’s sewer system received strong credit ratings this week from Standard & Poor’s (S&P) Rating Services and Moody’s Investors Service (Moody’s) in preparation for its upcoming revenue bond issuance. S&P assigned its "AA" long-term rating with a stable outlook to the 2014 sewer revenue bonds, and Moody’s assigned an "Aa3" long-term rating with a stable outlook.
The rating agencies assigned these ratings based on their view of the Pierce County sewer utility’s credit fundamentals, including:
- The essential nature of the utility’s services;
- A local economy that benefits from military and trade activity and healthy income indicators;
- A stable and very diverse customer base;
- Strong historical financial performance;
- Strong management of a significant capital plan that includes an expanded wastewater treatment plant;
- Maintenance of strong operating liquidity and healthy cash reserves;
- Relatively affordable sewer bills for a large metro area; and
- Strong expected coverage of the existing and projected debt service of the system by net revenues.
County officials expect the strong ratings to contribute favorable interest rates when the county offers the estimated $31.9 million 2014 revenue bonds in a competitive sale next week.
The bond proceeds will fund a portion of the projects identified in the sewer utility’s 2013-2018 capital facilities plan. The projects include the Chambers Creek Regional Wastewater Treatment Plant to expand capacity for projected growth in demand through 2022, as well as other improvements in the service area.
Stacey Scott, Pierce County Budget and Finance