Bond rating: Water Co. shows "strong liquidity'
COTTONWOOD - The City of Cottonwood has gotten a big shot in the arm for its borrowing capacity. The Standard & Poor's Rating Services has given Cottonwood a significant bump in it's bond rating, meaning the city bonding will be more desirable.
The change upgrades the rating from a "BBB" to an "A" rating, a three-notch increase.
The service says that when first issued the outstanding senior-lien water system revenue bonds were "reflected in its uncertainty related to the system's limited operation and financial history."
Over time, however, the bonds, which purchased four formerly private water companies, have shown "good financial performance and strong liquidity."
Other factors include a "diverse, mostly residential community" and a "primary retail center for the Verde Valley."
The service also considered a good debt service coverage, a fully funded debt service reserve and a plentiful water supply.
The outlook gives the bonds a stable future.