KBRA Affirms AA Rating for City of Los Angeles, CA Solid Waste Resources Revenue Bonds

25 Jun 2025 | New York

KBRA affirms the long-term rating of AA with a Stable Outlook for the City of Los Angeles, CA Solid Waste Resources Revenue Bonds.

The rating was affirmed because of the following key credit considerations:

Credit Positives

Strong legal framework with a clearly defined gross revenue pledge and solid bondholder protections.
Recently approved SWR Fee adjustment schedule is expected to restore full cost recovery to the City’s solid waste operations by FY 2027.
Fees are related to an essential governmental service provided across a very large and stable economic base.

Credit Challenges

SWR Fund operations have grown increasingly dependent on General Fund subsidies in recent years with this support doubling YoY to $134.8 million in FY 2025. While planned SWR Fee adjustments are expected to restore the fund to self-sufficiency by FY 2027, a delay in implementation would place additional pressure on the City’s General Fund at a time when it is already facing budget challenges stemming from the phase-out of pandemic-era federal assistance and wildfire events earlier this year.

For Upgrade

Establishment of a track record of consistent and timely SWR Fee rate adjustments resulting in self-sufficiency of the SWR program and reduced reliance on General Fund support.

For Downgrade

Reduced willingness of management and the City Council to provide General Fund support, as necessary, to ensure SWR Fund solvency in the absence of timely SWR Fee rate adjustments.
Inability to implement the approved SWR Fee rate adjustment, as planned, due to Proposition 218 challenges or other impediments.

To access ratings and relevant documents, click here.