DC Water Earns Historic AAA Credit Rating from Standard and Poors
This week, Standard and Poors Investors Service (S&P) upgraded DC Waters credit rating to AAA for senior lien revenue bonds and AA+ for subordinate lien revenue bonds. This marks the first time in history that DC Water has achieved the highest rating available by a rating agency.
DC Waters capital improvement projects leverage debt financing for funding. Paying lower interest rates lowers the overall costs of the project and annual operations expenses. This allows for less steep rate increases, since they are based on the overall cost of service.
This is a tremendous accomplishment made possible by the vision and leadership of George Hawkins, the hard and thoughtful work by the Office of the Chief Financial Officer, Mark Kim, and the thoughtful guidance of the Board of Directors, said DC Water Board Chair Matt Brown.
DC Water CEO and General Manager George S. Hawkins commented, DC Waters AAA rating is an affirmation of the strength of our credit, fiscal management and governance structure. The rating upgrade is also a testament to our operational excellence and to the value of the service we provide to our customers."
Added DC Water CFO Mark Kim, DC Water has developed one of the most progressive, efficient and equitable rate systems in the United States. In recent years, we have restructured our rates and established permanent water system maintenance funding, established new fees, tightened our operating budgets and put controls on our Capital Improvement Plan (CIP). In addition, we addressed affordability in our rate structure. We have proven our management team can consistently grow revenues and control costs.
The rating upgrade comes based on application of new criteria that S&P released January 19, 2016. S&P cited as key drivers of its rating exceptional management practices, very good transparency and disclosure, a detailed CIP that identifies funding sources and well-delineated policies.
In 2014, the Authority issued a $350 million green century bond and in 2015 issued an additional $100 million in green bonds. The former earned Bond Buyers Regional Deal of the Year Award and the IWA Global Water Awards for Water Deal of the Year.
