S&P rates California Water bonds AA-

Standard & Poor's said it assigned an AA- senior secured debt rating to California Water Service Co.'s (A+/stable) $100 million first mortgage bonds with 1 recovery rating indicating expectation for a full recovery.

Proceeds will be used to reduce short-term debt, to finance its capital-expenditure plans, to fund working capital and for general corporate purposes.

"California Water's business risk profile is excellent, reflecting a supportive regulatory environment, limited competition, largely residential markets and low operating risk," S&P analyst William Ferara said in a statement.

"The company's elevated capital-spending requirements for infrastructure replacement, increasing costs of compliance with water quality standards and limited control of future water supply somewhat temper the company's strengths," the analyst said.

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