OREANDA-NEWS. S&P Global Ratings has raised its rating on Cape Coral, Fla.'s series 2015 special obligation refunding revenue bonds to 'AA-' from 'A+'. The outlook is stable.

"The upgrade is based on the city's ability to maintain structural balance even in times of fiscal uncertainty," said S&P Global Ratings credit analyst Belle Wu.

The city's covenant to budget and appropriate non-ad valorem revenues secures the revenue bonds. Legally available non-ad valorem revenues totaled $72.7 million in fiscal 2015, having increased 11.3% year over year and providing strong 3.4x maximum annual debt service (MADS) coverage.

"The rating reflects our assessment of the city's very strong management, liquidity, and budgetary performance and flexibility," said Ms. Wu.

Cape Coral, with an estimated population of 170,053, is in Lee County on the southwest coast of Florida, approximately 125 miles south of Tampa.

"The stable outlook reflects our opinion that we do not expect the rating to change within the two-year outlook period," added Ms. Wu. We believe the city's strong management will be able to make the necessary financial decisions and budget adjustments to maintain balanced operations and continue to build its reserves.

If Cape Coral's wealth and income metrics were to increase to levels on par with higher rated peers, in conjunction with it maintaining its strong financial performance, we could consider raise the rating. If the city's financial performance were to severely deteriorate, resulting in significant declines in reserves, we could lower the rating.