Standard & Poor's Ratings Services has assigned its 'BBB-' rating to Virgin Islands Water and Power Authority's (WAPA) electric system revenue bonds, series 2012A, 2012B, and 2012C. At the same time, Standard & Poor's affirmed its 'BBB-' rating on WAPA's debt outstanding. The outlook is stable. Net electric system revenues secure the bonds. The 'BBB-' rating reflects our assessment of the following factors, which we view as credit weaknesses: High dependence on a single fuel type (oil), which we believe results in volatile rates and vulnerability to price spikes; High leverage, due in part to a $40 million deficit financing linked to high oil prices the past three years that reduced debt service coverage (DSC) levels; A low cash position,...
Companies mentioned in this report are: Virgin Islands Wtr & Pwr Auth
Action: New Rating
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