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18 Utility Rating Outlooks Revised To Stable From Positive Due To Pandemic, Recession Uncertainty

NEW YORK (S&P Global Ratings) April 23, 2020--S&P Global Ratings revised its outlook to stable from positive and affirmed its various long-term ratings on 18 public utility credits (see table below).

"The outlook revisions have been predicated on a combination of factors, including uncertainty surrounding the local service area economy in light of the recession," said S&P Global Ratings credit analyst Edward McGlade. While these outlook revisions apply to credits that previously carried positive outlooks, they correspond with the negative outlook revision we took on the entire Public Utilities Sector on April 1, 2020, which highlighted the sector's vulnerability to the potential negative economic effects presented by the COVID-19 pandemic.

We consider increased pressures on the service area economies and each utility's financial profile due to social distancing measures and persistent fears of the spread of the COVID-19 virus, as a social factor under our environmental, social and governance (ESG) factor assessment.

"While we believe each entity's revenues may experience some declines for fiscal 2020, ultimately, our expectation is that management will continue to manage the system, whether in delaying self-funded capital projects or by developing operational efficiencies to maintain sound coverage levels," said Mr. McGlade. While we continue to monitor events related to COVID-19, we do not currently expect it to affect the respective utility's ability to maintain budgetary balance and pay debt service costs. For more information, see our articles "COVID-19’s Potential Effects In U.S. Public Finance Vary By Sector" (published March 5, 2020, on RatingsDirect), "All U.S. Public Finance Sector Outlooks Are Now Negative" (published April 1, 2020), and "An Already Historic U.S. Downturn Now Looks Even Worse" (published April 16, 2020).

Environmental, social, and governance (ESG) factors

Overall, we believe that each entity's management team mitigated most of the system's ESG-related risk by adopting, adhering to, and adjusting its operating and financial policies and procedures. Therefore, we see most of the credit's ESG risk factors to be on par with those of other rated utilities. However, for now, increased pressures on the service area economy due to higher public health and safety risks related to COVID-19 will directly increase the system's overall social risk factors.

Public Utilities With Outlooks Revised To Stable From Positive
Issuer State Security Rating

Annapolis

MD Water/wastewater AA-/Stable

Auburndale

FL Water/wastewater A-/Stable

Braselton

GA Water/wastewater A/Stable

Cocoa

FL Water/wastewater AA/Stable

Etowah Water & Sewer Authority

GA Water/wastewater A+/Stable

Jonah Water Special Utility District

TX Water A+/Stable

Lakewood Water District

WA Water AA-/Stable

Midvale City

Ut Water/wastewater A+/Stable

Millbrae

CA Wastewater AA-/Stable

Napa Sanitation District

CA Wastewater AA/Stable

North Miami Beach

FL Water/wastewater A+/Stable

North Sumter County Utility Dependent District

FL Wastewater A-/Stable

Santa Fe Springs Water Utility Authority

CA Water A/Stable

Stamford Water Pollution Control Authority

CT Wastewater AA+/Stable

Stockton

CA Wastewater A/Stable

Stockton Public Financing Authority

CA Water A/Stable

Tucson

AZ Water AA/Stable

West Travis County Public Utility Agency

TX Water/wastewater A/Stable

Certain terms used in this report, particularly certain adjectives used to express our view on rating relevant factors, have specific meanings ascribed to them in our criteria, and should therefore be read in conjunction with such criteria. Please see Ratings Criteria at www.standardandpoors.com for further information. Complete ratings information is available to subscribers of RatingsDirect at www.capitaliq.com. All ratings affected by this rating action can be found on S&P Global Ratings' public website at www.standardandpoors.com. Use the Ratings search box located in the left column.

Primary Credit Analyst:Edward R McGlade, New York (1) 212-438-2061;
edward.mcglade@spglobal.com
Secondary Contact:Chloe S Weil, San Francisco (1) 415-371-5026;
chloe.weil@spglobal.com

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