...S&P Global Ratings revised the outlook to stable from negative and affirmed its 'A+' long-term rating and underlying rating (SPUR) on Los Angeles' solid waste resources (SWR) and sanitation equipment bonds. The outlook revision to stable reflects that while debt service has been inconsistent and at times insufficient, the system's liquidity position and soon-to-be-declining debt service schedule provide some confidence that the rating will remain at the current levels over the next two years. The rating reflects our view of the city's fiscal 2017 audited results, which indicate that system net revenue in fiscal 2017 (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 $213 million, or 263 days of operating costs--to meet a portion of debt service requirements in those years, rather than raise SWR fees. As a result, it projected...
