OREANDA-NEWS. S&P Global Ratings revised its outlook to stable from negative and affirmed its 'A-' rating on Auburndale, Fla.'s existing utility revenue bonds. At the same time, we assigned our 'A-' rating and stable outlook to Auburndale's series 2016 revenue refunding bonds.

"The outlook revision is based on the city's commitment to bolstering the financial risk profile of the utility system, which we think is sustainable given the recent preapproval of multiyear rate increases by the city commission, and lack of additional borrowing plans beyond these bonds," said S&P Global Ratings credit analyst Theodore Chapman.

The rating is based on the application of our revised criteria (see "Rating Methodology And Assumptions For U. S. Municipal Waterworks And Sanitary Sewer Utility Revenue Bonds", published Jan. 19, 2016) as well as what we view as the city's waterworks and sanitary sewer system's very strong enterprise risk profile and adequate financial risk profile.

The bonds are secured by a pledge of the net revenues of the city's water and sewer system, subordinate to the system's series 2006 prior lien bonds, for which about $9 million (or approximately 20% of all outstanding debt) are outstanding; the prior lien is closed. We have applied the utility criteria as the primary criteria to determine Auburndale's general creditworthiness (issuer credit rating) and have applied this rating to the senior-lien issues.

Bond proceeds will be used to retire about $1.5 million in draws on a committed line of credit as well as provide money to fund new projects.