King County, WA Series 2023 Sewer Revenue Bonds Rated ?AA+?; Outlook Is Stable

ENGLEWOOD (S&P Global Ratings) June 13, 2023--S&P Global Ratings assigned its 'AA+' long-term rating to King County, Wash.'s anticipated $125 million series 2023 sewer revenue bonds, issued for the county's wastewater treatment division (WTD). S&P Global Ratings also affirmed its 'AA+' long-term rating on the county's parity lien sewer revenue bonds, and its 'AA' long-term rating and underlying rating (SPUR) on the county's junior-lien sewer revenue bonds. The outlook, where applicable, is stable. The bonds are being issued to fund various capital improvement projects of the WTD. A rate covenant requires the system to generate debt service coverage (DSC) on parity bonds (senior-lien bonds) and parity lien obligations of at least 1.15x and on junior-lien and multimodal limited-tax general obligation

...planned debt over the next several years layered in, the system's financial capacity will not diminish to the point that metrics would become inconsistent with the existing ratings. The outlook further reflects our assessment of the county's historical and future willingness to adjust rates to meet rising debt service requirements. We believe that any reluctance or inability by the county council to raise rates could result in erosion of financial margins and liquidity and, in turn, diminished credit quality....

Ratings Action