Research Update: Charlotte, NC Water And Sewer System Refunding Revenue Bonds Assigned 'AAA' Rating; Outlook Is Stable

S&P Global Ratings assigned its 'AAA' long-term rating to Charlotte , N.C's series 2025 water and sewer system refunding revenue bonds. At the same time, S&P Global Ratings affirmed its 'AAA' rating on the city's water and sewer system revenue debt, with $1.9 billion of revenue bonds outstanding as of the fiscal year ended June 30, 2024. The outlook is stable. A net pledge of the water and sewer system secures the bonds. We view bond provisions as credit neutral. The broad-based rate covenant test requires net revenue, including 50% of surplus fund balance, to provide 1.2x annual revenue bond debt service coverage (DSC) and 1.0x annual DSC of total debt service. However, operations alone (excluding surplus) are required to

...The ratings appearing below the new issues represent an aggregation of debt issues (ASID) associated with related maturities. The maturities similarly reflect our opinion about the creditworthiness of the U.S. Public Finance obligor's legal pledge for payment of the financial obligation. Nevertheless, these maturities may have different credit ratings than the rating presented next to the ASID depending on whether or not additional legal pledge(s) support the specific maturity's payment obligation, such as credit enhancement, as a result of defeasance, or other factors....

Research Update