Fitch Ratings has assigned a “AA” rating on New Smyrna Beach Utilities Commission’s series 2026 revenue bonds and has affirmed the “AA” rating on NSB's outstanding series 2020 bonds.
The bonds are expected to price the week of April 6.
Fitch assesses NSB's standalone credit profile (SCP) at “aa.” The SCP represents the credit profile of the utility on a standalone basis irrespective of its relationship with and the credit quality of the city of New Smyrna Beach, Fla.
The Rating Outlook is Stable.
NSB's “AA” rating and “aa” SCP “reflect strong financial performance and declining leverage over the past five years, driven by a combination of rate increases and stabilized purchased power expenses over the past few years,” Fitch said.
Leverage, measured by net adjusted debt to adjusted funds available for debt service (FADS), improved to 4.9x in fiscal 2025 (FYE Sept. 30) from closer to 7.5x in 2021.
“The rating also considers the commission's very strong revenue defensibility and the strong operating risk assessment of NSB's combined electric, water, wastewater and reclaimed water system,” Fitch said.
The public power utility provides retail utility services in a growing service area with favorable demographic indicators and very strong rate flexibility, the rating agency noted.
The commission's low operating cost burden and neutral flexibility reflect access to a diverse power supply which includes its contracts with Florida Power and Light (FP&L).
NSB's financial profile is expected to remain very strong and supportive of the rating through Fitch's five-year forward look rating case scenario.
“Fitch expects the leverage ratio to increase in 2026 following this issuance but decline over the following years to below 7x. This is supported by consecutive rate increases approved by the commission and expected continued strong demand growth across all systems.”
