S&P Global Ratings assigned its 'AAA' rating to Charlotte, N.C's series 2024 water and sewer system 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 $1.5 billion of revenue bonds outstanding as of the fiscal year ended June 30, 2023. 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 1x annual DSC of total debt service. However, operations alone (excluding surplus) are required to provide net revenue
