Standard & Poor's Ratings Services raised its underlying rating (SPUR) on Grey Forest, Texas' gas utility system revenue bonds to 'A-' from 'BBB+' based on the system's continued maintenance of strong operating margins leading to strong debt service coverage (DSC), coupled with ongoing economic and customer base expansion. The outlook is stable.
A first-lien net revenue pledge of the city's gas utility distribution system secures the bonds. A debt service reserve fund in the amount of average annual debt service provides additional liquidity.
Grey Forest is a suburban bedroom community, 15 miles northwest of downtown San Antonio, Texas. Grey Forest Utilities, the city's utility, which provides gas service to more than 9,700 customers, has experienced healthy growth; its customer base grew by an average of more than 4% annually over the past decade.
