HomeMy Public PortalAbout2020B S&P RatingSummary:
Metropolitan St. Louis Sewer District,
Missouri; Combined Utility;
Water/Sewer
Primary Credit Analyst:
John Schulz, Centennial + 1 (303) 721 4385; john.schulz@spglobal.com
Secondary Contact:
Scott D Garrigan, New York + 1 (312) 233 7014; scott.garrigan@spglobal.com
Table Of Contents
Rating Action
Stable Outlook
Credit Opinion
Related Research
WWW.STANDARDANDPOORS.COM/RATINGSDIRECT NOVEMBER 13, 2020 1
Summary:
Metropolitan St. Louis Sewer District, Missouri;
Combined Utility; Water/Sewer
Credit Profile
US$120.0 mil wastewtr sys rev bnds ser 2020B due 05/01/2050
Long Term Rating AAA/Stable New
Rating Action
S&P Global Ratings assigned its 'AAA' rating to Metropolitan St. Louis Sewer District (MSD), Mo.'s roughly $120
million series 2020B wastewater system improvement revenue bonds. At the same time, S&P Global Ratings affirmed
its 'AAA' rating on MSD's existing wastewater system revenue debt. The outlook is stable.
Officials intend to use bond proceeds to fund a portion of the district's Capital Finance Plans Contemplated under
Consent Decree (CIRP).
A senior-lien net-wastewater-operating-revenue pledge, excluding stormwater-system-related property tax revenue,
secures the bonds. MSD has agreed to maintain rates and charges to sustain, at least, 1.25x DSC on all senior-lien debt
and 1.15x on all debt-service requirements. MSD could issue additional senior-lien revenue bonds if pro forma net
revenue equals, at least, 1.25x maximum annual debt service (MADS) on new and existing senior-lien debt and 1.15x
MADS on all new and existing debt.
Credit overview
The rating reflects our opinion of MSD's general creditworthiness and a combination of very strong enterprise-risk and
extremely strong financial-risk profiles; both profiles incorporate our analysis of historical and projected extremely
strong all-in DSC and liquidity. MSD makes timely multiyear rate increases to support its finances and a
capital-intensive combined-sewer-overflow (CSO) consent decree.
The affirmation of the 'AAA' rating reflects our opinion of MSD's extremely strong liquidity and management's
conservative and strategic planning, which provides financial and operating flexibility during the two-year outlook.
However, S&P Global Ratings believes there remains a high degree of uncertainty about the evolution of the
COVID-19 pandemic. Reports that at least one experimental vaccine is highly effective and might gain initial approval
by the end of the year are promising, but this is merely the first step toward a return to social and economic normality;
equally critical is the widespread availability of effective immunization, which could come by the middle of next year.
We use this assumption in assessing the economic and credit implications associated with the pandemic. For more
information, see our article "Potholes On The Road To Recovery" (published Sept. 29, 2020, on RatingsDirect). As the
situation evolves, we will update our assumptions and estimates accordingly.
The enterprise-risk profile reflects our opinion of MSD's:
WWW.STANDARDANDPOORS.COM/RATINGSDIRECT NOVEMBER 13, 2020 2
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