Standard&Poor's Ratings Services assigned its 'AA' rating and stable outlook to the Schertz-Seguin Local Government Corp. (the LGC), Texas' series 2012 contract revenue bonds, issued for San Antonio Water System (SAWS). The rating is based on our opinion of the general creditworthiness of SAWS as the obligor; SAWS' senior-lien rating is 'AA' with a stable outlook. Under terms of a water supply contract with the LGC, SAWS has an unconditional obligation to make monthly payments on a take-or-pay basis to the LGC. The payments are treated as an operating expense of SAWS' system equal to one-twelfth of the LGC's annual debt service requirement on these bonds. While there isn't a trust indenture, the LGC has pledged to maintain
