Standard & Poor’s Upgrades Pasadena Water Bonds to AAA, Citing Strong Financial
S&P Global Ratings raised its rating on Pasadena Water and Power’s outstanding water revenue refunding bonds from AA+ to AAA in late February citing the utility’s strong financial management and water supply resilience, the City reported Thursday.
The higher rating reflects S&P’s confidence in Pasadena’s ability to effectively manage its water resources and maintain financial stability going forward, according to an S&P statement.
“The AAA rating is underpinned by the water system’s robust historical financial performance coupled with its financial forecast, which we consider achievable and indicative that the water system will perpetuate consistently wide margins and strong liquidity balances during the five-year forecast period,” according to S&P.
The higher rating reflects greater confidence in Pasadena’s ability to manage its water resources effectively and maintain financial stability, the statement said.
S&P highlighted PWP’s diverse and wealthy customer base, affordable rates, and partnerships to ensure long-term water availability as strengths. The utility is also working to remove contaminants from groundwater and complies with all regulations, S&P said.
PWP Director Matthew Hawkesworth said the upgrade means management has significantly improved the city’s water sources and supply partnerships. S&P also called PWP’s rate structure comprehensive and stable during economic and drought fluctuations.
S&P analysts also said they do not anticipate customer resistance to current rate plans.
The report said PWP adheres to environmental and social governance principles despite climate change and drought risk.
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