OREANDA-NEWS. S&P Global Ratings raised its long-term rating on Berwick Area Joint Sewer Authority (BAJSA), Pa.'s sewer revenue bonds outstanding to 'A' from 'A-'. The outlook is stable.

At the same time, S&P Global Ratings assigned its 'A' rating and stable outlook on the authority's sewer revenue bonds, series 2016.

"The upgrade reflects our view of historical strong debt service coverage and strong liquidity," said S&P Global Ratings credit analyst Scott Winrow.

The upgrade also reflects the application of our revised criteria, "Rating Methodology And Assumptions For U. S. Municipal Waterworks And Sanitary Sewer Utility Revenue Bonds," published Jan. 19, 2016, on RatingsDirect. In addition, the rating reflects the combination of a strong enterprise risk profile and a strong financial risk profile.

The enterprise risk profile reflects our view of the system's:Stable area economy with below-average income indicators;Ample system resources and capacity to meet the needs of the system's stable and diverse customer base;Affordable rates representing 1.2% of median household effective buying income; andGood operational management practices and policies. The financial risk profile reflects our view of the system's:Extremely strong historical all-in debt service coverage;Very strong liquidity position that believe is sustainable in the near term;Moderate leverage based on a debt-to-capitalization ratio of about 41%, but likely to seek additional financing for capital needs in near future; andStandard financial management practices and policies. The purpose of the senior-lien bonds, together with other available funds of the authority, will be used to currently refund the authority's subordinate 2012 note, 2012 A note, and 2012 loan outstanding from the Pennsylvania Infrastructure Investment Authority.

The stable outlook reflects our expectation that the authority will maintain is a very strong financial profile given its stable customer base and manageable capital needs.

Any potential for an upgrade, which would most likely be beyond our outlook horizon, would be based on significantly stronger cash levels and economic indicators.

While we do not expect a rating action in the next two years, we could lower the rating following a deterioration of financial metrics. In addition, we would likely lower the rating if revenues and cash declined sharply.