Rating Action: Moody's affirms the City of Greenville Waterworks System's (SC) Aaa Revenue Bonds; outlook stableGlobal Credit Research - 16 Feb 2021New York, February 16, 2021 -- Moody's Investors Service has affirmed the Aaa rating on the City of Greenville Water Enterprise, SC's water revenue bonds. A stable outlook has been assigned. This rating action impacts $13.95 million of rated water revenue debt outstanding.RATINGS RATIONALEThe Aaa rating reflects the system's growing customer base that is driving increasing revenue and very healthy coverage without needing to tap the system's unlimited rate setting authority, ample system capacity, prudent financial management and capital planning. The rating also considers a somewhat small system size (O&M) and income levels that trail medians relative to other highly rated utilities.RATING OUTLOOKThe stable outlook is based on our expectation that debt service coverage and liquidity will remain healthy given the system's strong service area and prudent fiscal management. The debt ratio is also expected to remain moderate given limited outstanding capital needs.FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS- Significant declines in debt service coverage and liquidity- Substantial increase in the debt ratioLEGAL SECURITYThe bonds are payable from and secured by a pledge of and lien on the net revenues of the water system.The commissioners of the system have covenanted to charge and collect rates to maintain the sum of net revenues will be equal to at least 1.25 times coverage of debt service for all outstanding bonds. An additional bonds test states that the average net revenues for the two fiscal years immediately preceding the fiscal year in which the bonds are to be issued will be equal to at least 1.25 times maximum annual debt service on all outstanding debt. The board of commissioners have under the bond ordinance set a debt service reserve requirement equal to the lesser of the standard three prong test on the Series 2010 bonds and debt service reserve funded with cash at a fixed $1.4 million for the Series 2012 bonds. By commission policy, the system exceeds the covenant and maintains a cash-funded debt service reserve fund equal to 1.75x average annual principal and interest.PROFILEGreenville Water Enterprise is responsible for providing water treatment and distribution to most of Greenville County (Aaa stable) and portions of Anderson (Aa2), Pickens (Aa2) and Laurens counties in northwestern South Carolina. Greenville Water is governed by a commission which is composed of five members, three elected for staggered six-year terms and two ex-officio Commissioners, consisting of the Mayor and one City Council Member.METHODOLOGYThe principal methodology used in these ratings was US Municipal Utility Revenue Debt published in October 2017 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBM_1095545. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.REGULATORY DISCLOSURESFor further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. 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