S&P Global Ratings raised its long-term rating to 'AAA' from 'AA+' on Oceanside, Calif.'s outstanding sewer system revenue bonds. The outlook is stable. The rating upgrade reflects our view of the sewer fund's increasing coverage and days' cash on hand. We view the bond provisions as credit neutral. The bonds are payable from net revenues of the city's wastewater system. Per the rate covenant, amounts transferred from a rate stabilization fund are treated as revenues but may not count toward more than 25% of annual debt service. The rating also reflects the strong and sustained financial metrics of the sewer utility, most specifically its strong coverage and cash position. The city has maintained robust all-in coverage (AIC) of over 5.0x
