...S&P Global Ratings affirmed its 'A+' long-term rating and underlying rating (SPUR) on Los Angeles' solid waste resources (SWR) and sanitation equipment bonds. The outlook is negative. The rating reflects our view of the city's fiscal 2015 audited results, which indicate that system net revenue in fiscal 2015 (ended June 30) was insufficient to meet debt service requirements, with insufficient debt service coverage (DSC) projected through at least fiscal 2019. The city plans to rely on its strong cash balances--most recently $176 million, or 238 days of operating costs--to meet a portion of debt service requirements in those years, rather than raise SWR fees. As a result, the city projects cash balances to decline to $149.5 million, or 187 days of operating costs, in fiscal 2016, and further to $120.5 million, or 161 days of operating costs, in fiscal 2017. The negative outlook reflects our view that further rating downside is possible if DSC on a net basis is even worse than expected such...
