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New Haven, Conn. (June 27th, 2016) – Larry Bingaman, president and CEO of the South Central Connecticut Regional Water Authority (RWA), recently announced that Standard & Poor’s (S&P) Global Ratings raised its rating on RWA’s existing debt to ‘AA-’ from ‘A+’ and, at the same time, assigned its ‘AA-’ long-term rating to the RWA’s Thirty-second Series A Water Systems Revenue Bonds and Series B Water System Revenue Refunding Bonds (collectively the 32nd Series Bonds), noting a stable outlook. Moody’s Investor Service assigned an Aa3 to the RWA and the 32nd Series Bonds, also citing a stable outlook.
“I am pleased with the RWA’s recent bond ratings from S&P and Moody’s,” Bingaman said. “These ratings and stable outlook projections are a testament to the diligent work of our entire staff and the Authority’s prudent fiscal practices.”
The strong ratings contributed to RWA’s successful bond offering. There was significant investor interest in the bonds with approximately $1.3 billion in orders for the combined 32ndSeries Bond offering of approximately $164.4 million. The pricing took place on June 15th at an overall interest rate of 2.93%. The customer benefit of the lower interest rate is a $235,000 downward adjustment to the current rate increase and an approximately $33.5 million reduction in interest payments over the life of the bonds.
S&P based its upgrade on the trend of improved liquidity, stability in the service area and strong management practices. The RWA was assigned S&P’s second highest rating for both its operational management assessment (OMA) and financial management assessment (FMA).
The OMA evaluates S&P’s view of the effectiveness of utility management in ensuring that there is alignment of operational, environmental, strategic and financial goals to support the utility’s success.
The FMA analysis evaluates ongoing management practices and policies that comprehensively support financial performance and continuity as well as internal controls and reporting. The S&P stated that the Authority maintains conservative budgeting and strong budget monitoring while also maintaining a rolling five-year capital improvement plan, and forecasting financials to understand funding and rate needs.
The Moody’s Aa3 rating reflects the essential service provided by the system as well as the stable and mature customer base. According to Moody’s, this rating also factors in the Authority’s satisfactory financial position, which is supported by timely rate increases, elevated debt levels with moderate future borrowing plans and strong management.
About the South Central Connecticut Regional Water Authority:
The South Central Connecticut Regional Water Authority (RWA) provides customers with high-quality water and services at a reasonable cost while promoting the preservation of watershed land and aquifers. On average, the RWA supplies 45 million gallons of water per day to 430,000 people in a twenty-town region centered in New Haven, Conn.
The water utility maintains approximately 1,700 miles of distribution mains and more than 118,000 service connections across 260 contiguous square miles in its district. As a steward of the community and the environment, the RWA connects with over 10,000 students annually through its educational programs. The RWA is committed to being a conscious company that values all stakeholders.