OREANDA-NEWS. S&P Global Ratings assigned its 'AA-' rating to the Scott Township Water and Sewer Authority, Pa.'s series 2016 guaranteed sewer revenue bonds. The outlook is stable.

Officials plan to use bond proceeds to currently refund the authority's 2011A and B guaranteed sewer revenue bonds for present value savings. There is no extension of maturity.

"The rating reflects our opinion of the township's very strong budgetary flexibility and liquidity," said S&P Global Ratings credit analyst Michael Mooney.

The guaranteed sewer revenue bonds are secured by the net receipts and revenues of the sewer system. The guaranteed revenue bonds are additionally secured by a guarantee agreement with Scott Township, under which the township has pledged its full faith and credit for bond repayment. Given we currently view the township's general obligation (GO) as the stronger of the pledges, the rating is based on the borough's GO pledge.

Scott Township, with an estimated population of 4,924, is in north-central Lackawanna County in the Scranton-Wilkes Barre-Hazleton metropolitan area.

"The stable outlook reflects our view of the township's very strong liquidity and flexibility, while its very strong debt and retirement liabilities score enhances rating stability," added Mr. Mooney. We do not expect to change the rating within the outlook's two-year horizon.

We could lower the rating should the township continue to draw on reserves to levels we view as nominally low or to those in line with peers a lower rating. Conversely, we could raise the raise rating should economic metrics improve to levels in line with peers at a higher rating while simultaneously maintaining a pattern of consecutive surpluses that support reserve and liquidity levels we view as very strong.