Rating agencies re-affirm and upgrade Vallecitos’ ratings
Strong financial performance and the procurement of local water supplies and diversification has resulted in Fitch Ratings recently affirming Vallecitos Water District’s credit rating of ‘AA+’, with an Outlook Stable into the foreseeable future.
Fitch’s analysis determined the factors for the favorable rating to be a stable and diverse revenue source, very strong debt coverage performance, affordable rates in a sound regional economy, no debt planned for the next five years, and conservative assumptions when forecasting financial results.
Citing the District’s historically strong financial performance, Standard and Poor’s also conducted a rating which resulted in an upgrade to the District rating from AA to AA+. The improved rating serves as evidence that the Vallecitos Board of Directors and management are making the right decisions to keep the District going the right fiscal direction during this time of numerous challenges.
Both agencies agree that the District’s significant investments in local storage have lessened the risk of supply disruptions and benefited the region, a key rating factor. By purchasing desalinated water from the Carlsbad Desalination Facility, the district will have access to a drought-proof supply of 3,500 to 4,000 acre feet a year, equal to about 30% of current demand. The world’s leading credit rating agencies, Fitch Ratings and Standard and Poor provide credit research, commentary and benchmarks for agencies and businesses around the world.