Standard&Poor's Ratings Services assigned its 'AA' rating and 'AA' underlying rating (SPUR) on Huntsville, Ala.'s series 2007 electric system revenue warrants and affirmed its 'AA' SPUR ratings on Huntsville's previously issued electric system revenue warrants. The 'AA' rating reflects the city's: Strong and stable financial performance, with very high debt service coverage levels; A strong and diverse regional economy; and A manageable pay-as-you-go capital improvement program (CIP), with no plans for additional debt in the intermediate term. Offsetting these strengths are Huntsville's all-requirements relationship with a single supplier, Tennessee Valley Authority (TVA), which will be challenged to address capacity- and emissions-related capital costs in the coming years, in addition to an already high debt burden. The pledge of
