CORPUS CHRISTI, TX \u2014 Today, S&P Ratings lowered the City\u2019s Utility System credit rating from an \u201cAA-\u201d to an \u201cA.\u201d S&P Ratings stated that the lowering of the City\u2019s Utility System credit rating from an \u201cAA-\u201d to an \u201cA\u201d is the result of the current, acute drought risk as well as the potential for a Level 1 Water Emergency later this year.\u00a0<\/p>\n
Additionally, the downgrade is attributed to the necessity of securing additional water supply resources in the immediate term and to keep up with costs and debt service coverage ratios. The \u201cA\u201d rating is considered a medium grade credit rating. Additionally, S&P Ratings has placed a \u201cnegative credit watch\u201d on the City\u2019s Utility System.<\/p>\n
S&P Ratings stated that as part of the \u201cnegative credit watch,\u201d they will monitor several factors over the next three to six months, to include the City\u2019s overall financial performance, the timely completion of water supply projects, the ability to raise utility rates, and the continued possibility of a Level 1 Water Emergency. S&P Ratings stated that there is a potential for rating upgrades or further rating downgrades in the future depending on the completion of ongoing water supply projects on schedule and\/or securing additional revenues to keep up with the costs associated with the on-going water supply projects.<\/p>\n
S&P Ratings also respectively lowered the credit ratings for a series of debt issuances for the Nueces River Authority (NRA) and the Lavaca Navidad River Authority (LNRA) from \u201cAA-\u201d to \u201cA.\u201d The NRA and LNRA\u2019s series of debt issues affected by the lowered credit rating were for projects related to the production and transmission of water from Lake Texana via the Mary Rhodes Pipeline.<\/p>\n