Metropolitan Water District of Southern California gets F1 rating for $300 million water notes
Southern California's largest wholesale water supplier is preparing a new short-term debt sale as it continues to fund infrastructure needs and manage liquidity. The planned 2026 Series B Subordinate Water Revenue Notes are expected to total about $300 million and support capital projects as well as working capital replenishment.
Highlights
- Fitch Ratings assigned an 'F1' rating to Metropolitan Water District of Southern California's planned 2026 Series B Subordinate Water Revenue Notes totaling approximately $300 million.
- MWD will use the $300 million note proceeds to finance capital projects and replenish working capital, supporting operational and financial flexibility.
- The 'F1' rating underscores MWD's strong market access and credit quality as it executes water infrastructure and cash management initiatives in Southern California.
Planned note issuance and rating rationale
As reported by Fitch Ratings, the Metropolitan Water District of Southern California has received an 'F1' rating for its upcoming 2026 Series B Subordinate Water Revenue Notes. The notes are expected to be issued in an amount of approximately $300 million.MWD says it plans to use the proceeds for several purposes, including financing capital projects and replenishing working capital. Fitch says the rating reflects the utility's strong operational and financial profile, along with its continued commitment to sound fiscal management.
Funding supports utility operations and capital needs
The rating action highlights MWD's ability to access the market while supporting a broad water infrastructure program in Southern California. Short-term revenue notes such as these can help utilities balance near-term funding requirements with longer-term capital planning.For investors, the 'F1' grade indicates Fitch's highest short-term credit quality category. For MWD, the rating reinforces its financial standing as it advances project funding and ongoing cash management.
Our earlier coverage of Hainan Rubber’s proposed subordinated perpetual sustainable securities explained how Fitch assessed the instruments’ risk, including their junior ranking in the capital structure and the issuer’s ability to defer coupons. We also outlined Fitch’s view of the group’s leverage and liquidity profile, and why expected support considerations and funding access factored into the rating outcome.
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