Fitch Rates JEA's (Florida) $98MM Sr & $10MM Sub Rev Bnds 'AA'.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Fitch assigns an 'AA' rating to JEA JEA Journalism Education Association JEA Jacksonville Electric Authority JEA Journal of Egyptian Archaeology JEA Jamaica Exporters Association JEA Jackson Energy Authority (Jackson, Tennessee) Water and Sewer System Noun 1. sewer system - facility consisting of a system of sewers for carrying off liquid and solid sewage sewage system, sewage works facility, installation - a building or place that provides a particular service or is used for a particular industry; "the , Florida's (W&S) $98.3 million senior lien senior lien n. the first security interest (lien or claim) placed upon property at a time before other liens, which are called "junior" liens. (See: mortgage, deed of trust, lien, UCC-1) water and sewer system revenue bonds, 2007 series A, and $10.3 million subordinate lien water and sewer system revenue bonds, 2007 series A. In addition, Fitch affirms the 'AA' rating on the following outstanding debt: --$1.4 billion senior lien revenue bonds; --$343.7 million subordinate lien revenue bonds; --$129.9 million crossover subordinate bonds. The Rating Outlook is stable. Proceeds from the 2007 series A issuance will be used for the acquisition and addition of system improvements and extensions related to JEA's capital program, and advance refund $10 million of the JEA's water and sewer subordinate system revenue bonds, 2003 series C. The 2007 series A bonds are expected to price the week of Feb. 12, 2007 with JP Morgan as lead underwriter Lead underwriter The head of a syndicate of financial firms that are sponsoring an initial public offering of securities or a secondary offering of securities. Could also apply to bond issues. . The ratings for W&S take into consideration the system's low business risk profile as a water and sewer utility. Support for the rating is primarily derived from W&S's competitive retail rates, stable operating performance, and reliable long-term water supply that will be sufficient to meet system needs until about 2015 as well as other supportive factors as discussed further below. In addition, Fitch views JEA's management and governance practices, including plant operations, workforce development and long-term strategic planning Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people. initiatives to be exemplary. Credit concerns continue to center on JEA's debt profile, including higher than average leverage, and annual debt service that is increasing as a result of the continued financing of $100 million-$200 million in debt additions each year (2011 debt service is anticipated to be $129 million, roughly double 2004 levels). These concerns are partially mitigated by JEA's implementation of a new pricing philosophy (adopted in October 2005) which raised base rates, increased developer connection fees and capacity charges, and set enhanced debt service coverage and liquidity targets. JEA's retail water and sewer rates are expected to remain competitive for the region, despite these increases. The results of the new pricing philosophy are demonstrated in JEA's 2006 financial performance. Free cash flow has increased by about $25 million to $66 million; combined senior and subordinate lien debt service coverage improved to 2.08 times (x) from 1.76x in 2005 (excluding interest on JEA's outstanding crossover bonds). Coverage of full obligations (which adjusts for JEA's general fund transfer to the City of Jacksonville) has also improved to 1.9x from 1.5x. It should be noted that JEA's margins were helped by dry weather conditions in 2006 (which contributed to an 11% increase in water demand). Going forward Fitch believes that cash flows should continue to improve, as JEA implemented a second year of base rate increases in October 2006 and has a third rate increase planned for 2007. Even so, Fitch expects that JEA's future debt service coverage will remain in line with 2006 levels (approximately 2x, given the rising annual debt service). Fitch also notes that JEA's annual capital additions, while moderating, will remain relatively high for a W&S system in the 'AA' category as measured by debt per capita [Latin, By the heads or polls.] A term used in the Descent and Distribution of the estate of one who dies without a will. It means to share and share alike according to the number of individuals. and debt to plant ratios. Fitch believes that these planned capital additions are reasonable, as they relate primarily to growth-related projects, the acceleration of environmental projects addressing water quality standards at the St. Johns River Johns River may refer to any of the following rivers in the United States:
The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , working capital needs, or a reduction in demand due to weather- or other event-driven events, would be offset by further rate adjustments to maintain JEA's current financial targets. The JEA W&S business serves approximately 294,000 water and 220,000 sewer accounts. Revenues are approximately 54% residential, 38% commercial and industrial, 5% irrigation irrigation, in agriculture, artificial watering of the land. Although used chiefly in regions with annual rainfall of less than 20 in. (51 cm), it is also used in wetter areas to grow certain crops, e.g., rice. , and 3% governmental. The service area contains the majority of Duval County, FL, including the city of Jacksonville and the town of Baldwin, as well as neighboring portions of Nassau and St. Johns Counties. For more information, please see Fitch's new issue report dated Oct. 10, 2006 for the W&S system, or Fitch's 2007 'Median Ratios for Water and Sewer Revenue Bonds' dated Jan. 16, 2007 for peer comparison, both available on the Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. web site at www.fitchratings.com. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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