Press Release|Public Finance

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

28 Jun 2023   |   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.

Key Credit Considerations

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

Credit Positives

  • Strong legal framework with a clearly defined gross revenue pledge and strong bondholder protections.
  • Fees are related to an essential governmental service provided across a very large and stable economic base.

Credit Challenges

  • Solid waste resources fund cash balances have trended sharply downward in recent years as program costs have risen, and the City has opted to stabilize the fund with general fund transfers rather than adjustment to the SWR Fee.

Rating Sensitivities

For Upgrade

  • Transition to more frequent SWR Fee rate adjustments resulting in self-sufficiency of the solid waste resource fund 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 solid waste resources fund solvency in the absence of timely SRF Fee rate adjustment.

To access rating and relevant documents, click here.


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