Lemoore, CA's Series 2019 Water Revenue Bonds Assigned 'A+' Rating

CENTENNIAL (S&P Global Ratings) Feb. 4, 2019--S&P Global Ratings assigned an 
'A+' rating to Lemoore, Calif.'s series 2019 water revenue bonds. The rating 
reflects our view of the water system's strong enterprise risk profile and 
very strong financial risk profile. The outlook is stable.

"The stable outlook reflects our expectation that the local economy will 
continue to support the city's credit quality, cost for the Sustainable 
Groundwater Management Act implementation will remain moderate, and the system 
will sustain at least strong financial metrics that are in line with current 
projections," said S&P Global Ratings credit analyst Malcolm D'Silva.

The approximately $28 million series 2019 bonds are being issued to finance 
capital projects of the city's water treatment, production, storage and 
distribution system. We view the bond provisions as adequate and credit 
neutral. The bonds are secured by net revenues of the water system. Covenants 
include a 1.25x rate covenant and a 1.25x maximum annual debt service 
additional bonds test. The water system's obligation to make the series 2019 
debt service payments is junior to its obligation to pay debt service on an 
outstanding $5.3 million solar loan with Pinnacle. The city plans to fund a 
debt service reserve for the bonds sized at 100% of the standard three-prong 
test, and anticipates funding it by a surety policy.
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