The Metropolitan Water District of Southern California has maintained strong credit ratings from the nation’s leading credit rating agencies, reflecting Metropolitan’s sound financial management, strong liquidity and disciplined long-term planning as the district fulfills its essential role in providing a reliable water supply for Southern California.
Last week, S&P Global Ratings reaffirmed its top AAA long-term rating to Metropolitan’s anticipated $280 million water revenue bonds, 2026 Series A, and also assigned an AA+/A-1+ dual rating to its proposed $200 million variable-rate subordinate water revenue bonds, 2026 Series B. Moody’s Ratings affirmed Metropolitan’s Aa1 senior revenue bond rating and assigned an Aa1 bond rating to the district’s proposed 2026 Series A bonds. Fitch Ratings assigned an AA+ rating to the 2026 Series B bonds and affirmed its existing ratings on the district’s outstanding debt, including AAA for its general obligation bonds.
“Earlier this year, our board of directors unanimously approved a fiscally prudent budget and rate structure that strengthens Metropolitan’s financial foundation by providing more predictable revenue to cover fixed costs,” said board Chair Adán Ortega, Jr. “That greater financial stability, combined with our commitment to investing in critical infrastructure through our Capital Investment Plan, positions Metropolitan to manage financial challenges responsibly and sustain the region’s water reliability for the long term.”
Strong credit ratings help Metropolitan borrow money at favorable interest rates, reducing the near- and long-term cost of financing the projects needed to maintain and improve the region’s water system. By managing borrowing costs, Metropolitan protects the long-term affordability of water. Metropolitan continually invests in its facilities and programs that support water deliveries to its 26 member water agencies, which strengthens its water reliability and resilience to serve nearly 19 million people across six counties.
“Metropolitan’s strong credit ratings reflect our sound financial management, strong cash position and disciplined long-term planning. These strengths provide the financial flexibility to navigate uncertainty, invest in critical infrastructure and maintain a reliable, affordable water supply for Southern California,” said Katano Kasaine, Metropolitan’s assistant general manager, chief financial officer and treasurer.
The rating agencies cited Metropolitan’s financial management and planning as important strengths.
S&P pointed to Metropolitan’s strong financial profile, strategic importance to Southern California’s economy and methodical approach to managing climate-related risks and potential water shortages. Moody’s highlighted the district’s debt service coverage, strong liquidity, and prudent financial and budgetary practices. Fitch’s rating of AA+ reflects Metropolitan’s very strong revenue and operating risk profiles, historically low leverage and improved financial performance.
The agencies also recognized the challenges Metropolitan faces, including climate change, drought, major infrastructure investment needs, and uncertainty surrounding future Colorado River operations.
“The decisions we make today will shape Southern California’s water future for decades to come,” said Metropolitan General Manager Shivaji Deshmukh. “We have a responsibility to look beyond immediate challenges and prepare for the changing conditions that will affect how we plan, manage and deliver water across the region.”
Metropolitan is preparing for the future through long-term water supply planning to adapt to climate change, investing in its system through its Capital Investment Plan and diversifying and strengthening the region’s water supply portfolio.
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