Standard&Poor's Ratings Services assigned its 'AA' rating to Redlands Financing Authority, Calif.'s series 2012A water revenue refunding bonds, issued for the City of Redlands. At the same time, we affirmed our 'AA' long-term rating and underlying rating (SPUR) on the authority's 1999A water revenue bonds. The outlook is stable. The ratings reflect our view of the water system's: Primarily residential and very diverse customer base; Strong debt service coverage (DSC) that is no longer reliant on connection fees to maintain strong levels; Diverse water supply portfolio of groundwater and surface water sources with very limited need for imported water; Water rates that are moderately low after several years of roughly annual rate increases; Strong liquidity, with unrestricted cash
