Press Release|Public Finance
KBRA Affirms AAA Rating to the City of San José Financing Authority's (CA) Wastewater Revenue Bonds, Stable Outlook
15 Nov 2023 | New York
KBRA affirms the long-term rating of AAA for the City of San José Financing Authority's (CA) Series 2022B Wastewater Revenue Bonds. The Outlook is Stable.
Key Credit Considerations
The rating actions reflect the following key credit considerations:
Credit Positives
- Very affluent, highly educated service area, with a strong employment base in the heart of Silicon Valley.
- Robust financial performance as evident in strong debt service coverage, ample liquidity, and modest debt burden.
- Autonomous rate-setting authority, competitive wastewater rates and favorable collections given the inclusion of sewer charges on the Santa Clara County’s property tax bills and supported by the Teeter Plan.
- Manageable debt burden, with no additional long-term borrowing planned over the five-year planning horizon.
Credit Challenges
- Continue to effectively manage the wastewater system's large capital plan schedule and costs, with limited new debt requirements through FY 2027.
Rating Sensitivities
For Upgrade
- Not applicable at this rating level.
For Downgrade
- Failure to adequately raise sewer rates and/or maintain debt service coverage and liquidity metrics commensurate with the rating.
To access rating and relevant documents, click here.