June 12, 2024

Fitch Ratings (Fitch), one of the big three international ratings agencies, upgraded its

rating to ‘AAA’ for the Vallecitos Water District. ‘AAA’ is the highest possible rating

available from Fitch. The ‘AAA’ rating benefits the District by allowing Vallecitos to issue

debt at a lower interest rate resulting in lower financing costs for necessary water

reliability and infrastructure projects.

Each year, Fitch reviews credit rating scores to determine creditworthiness and financial

standings for companies and countries around the world. AAA-rated bonds are

considered to have the highest degree of creditworthiness and a strong financial profile

with exceptionally low risk for default. Key components of the rating that Fitch assesses

include revenue defensibility or the ability to diversify income; operating risk including

foreseeable expenses and the need to rely on loans; and financial profile or the liquidity

and flexibility of the budget. Fitch’s rating is made up of several key drivers. The AAA

rating for Vallecitos Water District indicates a very strong financial profile, exceptionally

low leverage, and remarkably low risk for investors.

“The announcement of Vallecitos Water District’s upgrade to a ‘AAA’ rating from Fitch is

a substantial honor,” said Westley Owen, Chief Financial Officer for Vallecitos Water

District. “Our dedication to financial stability, transparency, and strong reserves have led

to this achievement.”

Further details and information on the Fitch Rating can be found here:

https://www.fitchratings.com/research/us-public-finance/fitch-upgrades-vallecitos-water- district-ca-cops-to-aaa-outlook-stable-07-07-2023