...+ S&P Global Ratings affirmed its '##+' rating on Los Angeles, Calif.'s outstanding senior-lien wastewater system bonds and its '##' long-term rating and underlying rating (SPUR) on the city's outstanding subordinate-lien wastewater system bonds. + The outlook is negative. + The affirmation reflects our view of the Los Angeles Bureau of Sanitation (LASAN) wastewater system's five-year approved rate action, which was adopted by the City Council in May 2024, and if fully implemented, will set an achievable trajectory for upcoming- financial performance and capital spending. + The negative outlook reflects management's near-term financial forecast, which indicates all-in debt service coverage declining to about 1.3x in fiscal 2025, which we consider thin relative to that of its peers at the '##+' rating level, before rebounding to 1.8x-2.2x thereafter, assuming future rate adjustments are implemented as adopted in the rate action. We believe there is a one-in-three chance we could lower the...
