KBRA Affirms AAA Rating for the City of San José Financing Authority, Wastewater Revenue Bonds; Stable Outlook
6 Nov 2025 | New York
KBRA affirms the long-term rating of AAA for the City of San José Financing Authority's outstanding Series 2022B Wastewater Revenue Bonds. The Outlook is Stable.
The long-term rating reflects the strong service area economy, anchored by the City of San José (the City), autonomous rate setting authority, ample wastewater treatment capacity, competitive sewer rates, and strong financial performance characterized by healthy debt service coverage and liquidity. The rating is additionally supported by the inclusion of the vast majority of the City’s sewer charges on the County of Santa Clara’s (the County’s) secured property tax roll, with timely collections maintained via participation in the County’s Teeter Plan.
Key Credit Considerations
The rating was affirmed because of the following key credit considerations:
Credit Positives
- Affluent and highly educated service area, with a strong economic base and low poverty level, located in the heart of Silicon Valley.
- Robust financial performance as evidenced by strong debt service coverage, liquidity, and modest debt burden.
- Autonomous rate-setting authority, competitive wastewater rates and favorable collections given the inclusion of sewer charges on the County’s property tax bills, which are supported by the Teeter Plan.
Credit Challenges
- To continue to effectively manage the large capital plan, schedule, and costs through FY2030, with a manageable debt burden.
Rating Sensitivities
For Upgrade
- Not applicable at this rating level.
For Downgrade
- Failure to adequately adjust sewer rates and/or maintain debt service coverage, liquidity and leverage metrics commensurate with the rating.
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