Earlier this week, S&P Global Ratings (S&P Global) released a report that removed Central Alabama Water (CAW) from “CreditWatch Negative” and changed its Outlook to “Stable” while affirming its AA- bond rating, citing efforts made by new management.
"The stable outlook reflects the notable strides management has made in a relatively short time to address the system’s fiscal stresses and ensure fiscal stability, and maintain cash and coverage levels commensurate with the current rating while addressing sizable future capital needs, as well as our expectation that positive strides will be made over our two-year outlook horizon," the report explains.
"The rating action reflects the receipt of financial updates, conversations with current management, and revisions made to the fiscal 2026 operating and capital budgets indicating certain necessary, yet unpopular, cost-cutting measures to stabilize the system’s financial position while addressing important capital needs," the report continues.
The changes come just months after S&P Global downgraded the utility's bond rating as a result of financial decisions that ultimately led to legislative action to reconstitute the board into a regional one.
SEE: S&P Global lowers Central Alabama Water bond rating to AA- with CreditWatch Negative
"The stable outlook reflects the notable strides management has made in a relatively short time to address the system’s fiscal stresses and ensure fiscal stability, and maintain cash and coverage levels commensurate with the current rating while addressing sizable future capital needs, as well as our expectation that positive strides will be made over our two-year outlook horizon," the report states.
“CAW’s leadership team is pleased that S&P Global positively acknowledged the actions CAW is taking to improve its financial situation,” said Jeffrey F. Thompson, CEO of Central Alabama Water, in a statement. “Difficult decisions were required to move the system in the right direction operationally and we still have a long road ahead to become the system our community and customers deserve. S&P Global’s validation of the actions taken so far is an indication that we are headed in the right direction.”
“Every decision at CAW is focused on the long-term best interest of the system and its customers,” he continued. “We are proud that S&P Global recognizes the fiscally responsible work our team is achieving every single day for customers across our service area. We look forward to the work ahead and will continue to take steps to improve CAW and provide our customers with the world-class water utility they deserve.”
Since November 2025, the executive team has taken steps to improve the utility’s financial outlook and limit negative impact on customers by reducing operating costs. CAW’s leadership team and board are adhering to a policy of ensuring the system’s operational costs are appropriately managed before considering the implementation of rate increases for residential and commercial customers in the future.
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