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Public utilities

Moody's Assigns Aa1 Rating to Broward County, FL's Water and Sewer Utility Refunding Revenue Bonds

Strategic Insights

— 1 min read

Broward County, located in south Florida, has been assigned an Aa1 rating for its Water and Sewer Utility Refunding Revenue Bonds, Series 2025, with an estimated par value of $161.5 million. The rating reflects the system's large size, diverse and stable customer base, and adequate capacity through 2035. The outlook is stable, with management expecting debt service coverage to remain at similar levels going forward.

Key Takeaways:

  • The Aa1 water and sewer rating reflects the system's large size, diverse and stable customer base, and adequate capacity through 2035.
  • The county's Aaa issuer rating reflects its large, diverse and growing economy in south Florida, with strong cash and fund balances, and low long-term liabilities.
  • The economy is exposed to weather-related natural disasters, including hurricanes and flooding, but the county's mitigation efforts and capital planning balance these risks.
  • The Aaa non-ad valorem rating reflects the non-contingent nature of the pledge and the county's ability to manage and control the revenues.
  • The Aaa rating on the county's Sales Tax bonds reflects the broad nature of the pledge, strong maximum annual debt service (MADS) coverage, and positive average annual growth over the last ten years.
  • The Aa2 rating on the county's Tourist Development Tax bonds reflects the narrowness of the pledge and solid maximum annual debt service (MADS) coverage.

Statistics:

  • The county has an estimated par value of $161.5 million for the Water and Sewer Utility Refunding Revenue Bonds, Series 2025.
  • The county has approximately $5 billion in debt outstanding, including $800 million in water and sewer revenue debt, as of fiscal 2024.
  • The water and sewer coverage is approximately 4x revenues, with wholesale customers paying 52% of debt service.
  • The county's full value per capita is a strong $241,725, and cash and fund balances are strong, having grown in line with revenue growth.
  • The fixed costs are slightly elevated at 13.1%, primarily driven by enterprise debt paid from enterprise revenues.
  • The economy is exposed to weather-related natural disasters, including hurricanes and flooding, based on its coastal location.

Sources:

  • Moody's Investor's Service
  • US Cities and Counties rating methodology, published in July 2024
  • US Municipal Utility Revenue Debt rating methodology, published in March 2024

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