Global Header | Moody's
Close
Please Note
We brought you to this page based on your search query. If this isn't what you are looking for, you can continue to Search Results for ""
The maximum number of items you can export is 3,000. Please reduce your list by using the filtering tool to the left.
Close
Close
Email Research
Recipient email addresses will not be used in mailing lists or redistributed.
Recipient's
Email

Use semicolon to separate each address, limit to 20 addresses.
Enter the
characters you see
Close
Email Research
Thank you for your interest in sharing Moody's Research. You have reached the daily limit of Research email sharings.
Close
Thank you!
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
New Issue:

MOODY'S ASSIGNS A1 RATING TO SOUTH ADAMS COUNTY WATER AND SANITATION DISTRICT, CO, WATER AND WASTEWATER REVENUE BONDS, SERIES 2010

24 Sep 2010

$13.5 MILLION OF RATED DEBT AFFECTED, INCLUDING CURRENT OFFERING

Water/Sewer
CO

Moody's Rating

ISSUE

RATING

Water and Wastewater Revenue Bonds, Series 2010

A1

  Sale Amount

$12,735,000

  Expected Sale Date

10/05/10

  Rating Description

Water and Sewer Revenue Bonds

 

Opinion

NEW YORK, Sep 24, 2010 -- Moody's Investors Service has assigned an A1 rating to South Adams County Water and Sanitation District, Colorado, Water and Wastewater Revenue Bonds, Series 2010 in the amount of $12.7 million. At this time, Moody's also affirms the A1 rating on the district's Utility Revenue Refunding Bonds, Series 2005 outstanding in the amount of $800,000. The bonds are secured by the district's first lien pledge of combined net revenues from its water and wastewater operations. Bond proceeds will finance contributions for potable water supply agreements with the Denver Water Board as well as capital improvements to the district's facilities.

RATING RATIONALE

The A1 rating assignment primarily reflects the district's satisfactory financial operations, small but growing service area despite recent economic downturn, adequate legal provisions, and a manageable debt profile.

SMALL SERVICE AREA PROXIMATE TO DENVER

The 64 square-mile district is located in Adams County (Aa1 Issuer rating), northeast of the City and County of Denver (Aaa UTGO rating), and primarily serves Commerce City. The primarily-residential district serves an estimated population of 50,000 and reports 14,925 residential and 1,284 commercial accounts. The service area is not built-out and has significant capacity for new development in its northern region; however, the ongoing national housing downturn has slowed new development significantly since 2007.

The district obtains a significant share of its potable water supply from the Denver Water Board (DWB) (Aaa UTGO rating). In 1998, the district entered into a perpetual lease agreement with DWB to supply up to 4,000 acre-feet of potable water annually after receiving $48.0 million of funding from the Army and Shell Oil. These funds were allocated to help the district seek out a replacement water supply following water contamination issues, which have since been mitigated, involving the federal Rocky Mountain Arsenal site neighboring the district. A portion of the bond proceeds will fund the district's purchase of the remaining 1,000 acre-feet of potable water available under the agreement. In 2007, the district entered into a temporary agreement with DWB to supply over 5,000 acre-feet of additional potable water through 2012, including an annual 50.0% take-or-pay provision. The agreement provides additional supply to accommodate near-term growth in demand within the service area; a portion of the bond proceeds will reimburse the district for its 2010 contribution under the agreement. Additionally, the district entered into an agreement with Farmers' Reservoir Irrigation Company (FRICO) in 2006 to secure an additional 5,000 acre-feet of potable water supply for the northern portion of the district. The agreement is financed primarily by tap fees collected in the northern portion of the district and passed-through the district to FRICO.

Beginning in 2015, the district will transmit wastewater from a northern portion of the district to a new treatment facility being constructed by the Metropolitan Wastewater Reclamation District (MWRD) (Aa1 senior revenue rating). Under this agreement, the district will collect charges for wastewater service and remit funds to MWRD for providing treatment services. Management notes that the district may transmit a greater share of its wastewater treatment needs to MWRD over time.

SATISFACTORY OPERATING PERFORMANCE AND DEBT SERVICE COVERAGE

Moody's expects that management will impose necessary water and wastewater rate increases to maintain pledged net revenues sufficient to cover debt service. Since 2005, the district's coverage of debt service declined significantly due to a dramatic slowdown in new construction amid strained economic conditions that eroded cash capital contributions, including connection fees, that are pledged for debt service. Audited financial data for 2009 indicate that net pledged revenues provided coverage of 3.28 times maximum annual debt service (MADS); net revenues less pledged system development revenues provided notably lower coverage of 1.22 times MADS. However, management somewhat optimistically projects that system development revenues will increase over the near-term. Specifically, officials anticipate as many as 500 new residential connections will come online annually in 2011 and 2012, followed by 750 new connections in 2013 and 900 new connections in 2014. As such, related growth in system development revenues may bolster future debt service coverage levels.

As of 2009, the district's water service revenues represented 44.9% of pledged revenues (or $8.6 million) while wastewater service revenues accounted for 32.1% of pledged revenues (or $6.2 million). The district also receives a small amount of general property taxes annually, which are not pledged for debt service, and represented 8.3% of gross revenues (or $1.8 million) as of fiscal 2009; the levy rate has remained frozen since the implementation of Taxpayer Bill of Rights (TABOR) provisions.

The district's boards plans to annually enact 9.0% rate increases in 2011 and 2012, followed by 5.0% increases in 2013 and 2014. Additionally, the board plans to increase connection fees by 3.0 to 5.0% annually through 2014. Management also notes that the district's average monthly charges for services are consistently among the lowest for water and sewer enterprises in the Denver metropolitan area.

MANAGEABLE DEBT PROFILE; NO ADDITIONAL BORROWING FOR SEVERAL YEARS

Moody's expects that the district's debt profile will remain manageable given a modest debt ratio of 1.2% and no additional borrowing expected until approximately 2015. Bond proceeds will finance additional potable water supply under an existing permanent lease with the DWB ($9.0 million), reimburse the district for an annual contribution under a temporary potable water supply agreement with the DWB ($1.0 million), as well as fund capital improvements for facilities ($2.7 million).

SATISFACTORY LEGAL PROVISIONS

The bonds are secured by the district's irrevocable non-exclusive pledge of, and first lien on, combined net revenues from its water and wastewater operations. Parity obligations include the district's Utility Revenue Refunding Bonds, Series 2005 maturing in 2010 and a loan through the Colorado Water Resources Power Development Authority (CWRPDA) outstanding in the amount of $5.0 million that matures in 2022. Legal provisions are adequate with the rate covenant at 125.0% of annual debt service and an additional bonds test of 125.0% of maximum annual debt service. Of note, the debt service reserve requirement on the bonds is a relatively weak "springing reserve" that will be funded by equal payments into a reserve account over twenty-four months should coverage of maximum annual debt service decline below 1.50 times pledged net revenues. Moody's expects that the district will continue to implement rate increases as required to maintain sufficient coverage of debt service from pledged net revenues.

KEY STATISTICS

Estimated population: 50,000

Estimated accounts: 14,925 residential, 1,284 commercial

Payout of principal (10 years): 53.5%

Operating ratio, 2009: 74.0%

Debt ratio, 2009: 1.2%

Annual debt service coverage, 2009: 3.58 times

MADS coverage, 2009: 3.28 times

Annual debt service coverage net of system development revenues, 2009: 1.33 times

MADS coverage net of system development revenues, 2009: 1.22 times

Other postemployment benefits (OPEB) liability: N/A

The principal methodology used in rating South Adams County Water & Sanitation District, Colorado was Analytical Framework For Water And Sewer System Ratings, rating methodology published in August 1999. Other methodologies and factors that may have been considered in the process of rating this issuer can also be found on Moody's website.

The last rating action with respect to [South Adams County Water and Sanitation District, Colorado was on June 28, 2005, when a municipal scale rating of A3 was assigned to Utility Revenue Refunding Bonds, Series 2005. That rating was subsequently recalibrated to a global scale rating of A1 on May 1, 2010.

REGULATORY DISCLOSURES

Information sources used to prepare the credit rating are the following: parties involved in the ratings, parties not involved in the ratings, confidential and proprietary Moody's Analytics' information.

Moody's Investors Service considers the quality of information available on the credit satisfactory for the purposes of assigning a credit rating.

MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY'S is not an auditor and cannot in every instance independently verify or validate information received in the rating process.

Please see ratings tab on the issuer/entity page on Moodys.com for the last rating action and the rating history.

The date on which some Credit Ratings were first released goes back to a time before Moody's Investors Service's Credit Ratings were fully digitized and accurate data may not be available. Consequently, Moody's Investors Service provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

Please see the Credit Policy page on Moodys.com for the methodologies used in determining ratings, further information on the meaning of each rating category and the definition of default and recovery.

Analysts

Patrick Liberatore
Analyst
Public Finance Group
Moody's Investors Service

Dan Steed
Backup Analyst
Public Finance Group
Moody's Investors Service

Matthew A. Jones
Senior Credit Officer
Public Finance Group
Moody's Investors Service

Contacts

Journalists: (212) 553-0376
Research Clients: (212) 553-1653


Moody's Investors Service
250 Greenwich Street
New York, NY 10007
USA

MOODY'S ASSIGNS A1 RATING TO SOUTH ADAMS COUNTY WATER AND SANITATION DISTRICT, CO, WATER AND WASTEWATER REVENUE BONDS, SERIES 2010
No Related Data.
© 2019 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE MOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.

CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody’s publications.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.

Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating, agreed to pay to Moody’s Investors Service, Inc. for ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.

Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY250,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

​​​​
Global Footer | Moody's