S&P Global Ratings assigned its 'AAA' rating to Orange County Utilities (OCU), Fla.'s $140.3 million in series 2025 water and wastewater utility revenue bonds. We also affirmed our 'AAA' long-term rating on OCU?s existing utility revenue bonds outstanding. The outlook is stable. The series 2025 bonds will be used for expansion projects and system maintenance and reimburse capital expenses already incurred, as well as to pay for the cost of issuance. The senior-lien bonds are secured by a pledge of the net revenue of the water and wastewater systems. We view the bond provisions as credit neutral. Key provisions include a rate covenant of 1.2x annual debt service and an additional bonds test of 1.2x maximum annual debt service (MADS).
