Providence Water Supply Board, RI's Series 2019A Revenue Bonds Rated 'AA-'

CENTENNIAL (S&P Global Ratings) May 17, 2019--S&P Global Ratings assigned its 'AA-' long-term rating to Providence Water Supply Board (PWSB), R.I.'s series 2019A revenue bonds, and affirmed its rating on the board's revenue bonds outstanding, purchased by the Rhode Island Infrastructure Bank. The rating reflects, in our opinion, the combination of very strong enterprise and financial risk profiles. The outlook is stable.
"The stable outlook reflects our expectation that the Public Utility Commission will continue to approve the rate increases necessary for PWSB's operations, capital needs, and debt service payments," said S&P Global Ratings credit analyst Melody Vinje. "We will continue to monitor future proposals to use the value of the water supply and service provided by PWSB to improve the city's finances."
The 2019 bonds will be used for capital improvements, particularly for water main work, and to pay the costs of issuance. The bonds carry a net revenue pledge of the water and sewer system, and are at parity with revenue debt outstanding. The bonds have a rate covenant of 1.25x annual debt service and an additional bonds test, and will have a debt service reserve funded to the lesser of maximum annual debt service, 125% of average annual debt service, or 10% of principal outstanding.
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