(Kansas City, Mo.) – The strong financial health of KC Water Services’ water utility was recently affirmed by two of the nation’s largest credit rating agencies.
Standard & Poor’s Rating Services affirmed its AA+ rating and Moody’s Investors Service affirmed its Aa2 rating on KC Water Services’ existing water revenue-secured debt.
“I’m proud of KC Water Services’ strong performance which was recently affirmed by the nation’s credit rating agencies,” said Troy Schulte, City Manager of the City of Kansas City, Missouri. “These positive ratings directly benefit KC Water Services’ customers because strong bond ratings ultimately result in lower borrowing costs and more dollars for improving the City’s water infrastructure.”
In addition, Standard & Poor’s affirmed its AA+ rating and Moody’s affirmed its Aa2 rating for KC Water Services’ upcoming $65 million water revenue bond sale, which will take place on April 9.
“The upcoming water bond sale will play a key role in funding our data-driven Water Main Replacement Program,” said KC Water Services Director Terry Leeds. “Through this program, our goal is to annually replace 28 miles of critical water main in areas of the city that are statistically proven to have water mains that are likely to fail. This proactive work means fewer water main breaks, meaning fewer frustrating service interruptions for customers. And, once replaced, these pipes should last for up to 100 years.”
According to Standard & Poor’s, its AA+ rating reflects a “very strong capacity to meet financial commitments.” In its ratings rationale, Standard & Poor’s noted KC Water Services’ “large service base that serves much of the Kansas City metropolitan statistical area” and “strong financial performance.”
According to Moody’s Investors Service, obligations rated Aa2 “are judged to be of high quality and are subject to very low credit risk.” In its ratings rationale for KC Water Services, Moody’s noted that, “Assignment and affirmation of the Aa2 rating reflects the system’s stable financial performance, which is the result of annual rate increases and prudent management practices, including the close monitoring of expenditures. The rating also includes a stable customer base and service area, an ample water supply and system capable of meeting current demand, as well as a manageable debt profile with plans for cash funding and debt issuances to meet capital improvements moving forward.”
KC Water Services continues to achieve savings through borrowing at low interest rates and timely refinancing. On November 4, 2011, $97 million in wastewater bonds were issued at 3.93 percent for a period of 25 years. On February 7, 2012, $52 million in water bonds were issued at 3.27 percent for a period of 25 years. On November 29, 2012, wastewater bonds were issued at 2.86 percent for a period of 25 years. On February 27, 2013, water bonds were issued at 3.14 percent for a period of 25 years. On May 8, 2014, water bonds were issued at 3.24 percent for a period of 25 years.
For more information, please contact Kip Peterson, Communications Manager, at email@example.com or 816.513.0280.
KC Water maintains and operates water treatment and distribution systems, stormwater management systems, and wastewater collection and treatment systems for residential and business customers in Kansas City and for wholesale customers in the Kansas City area. KC Water is primarily funded by fees charged to customers based on their use or impacts on the three utility systems.