NEW YORK–(BUSINESS WIRE)–#creditratingagency–KBRA assigns a long-term rating of A to the Port Neches-Groves Independent School District, TX: Unlimited Tax School Building Bonds, Series 2026. The Outlook is Stable.
The Series 2026 Bonds have received conditional approval for and are expected to be issued with a guarantee of the payment of principal and interest from the State’s Permanent School Fund (“PSF”) guarantee program. KBRA’s ratings for these and all other outstanding series, including both those with and without the PSF guarantee, are based solely on the underlying credit standing of the District, without considering support afforded by the PSF guarantee program.
Key Credit Considerations
The rating actions reflect the following key credit considerations:
Credit Positives
- Inherent strength of the District’s unlimited tax ad valorem pledge securing the bonds.
Credit Challenges
- Highly concentrated tax base that has experienced significant volatility and limited growth in recent years.
- Multiple consecutive years of operating deficits and declining fund balances.
- Long-term trend of relatively flat enrollment and evolving statutory funding environment.
Rating Sensitivities
For Upgrade
- Demonstrated improvement in operating performance and growth in fund balances.
For Downgrade
- Continued significant operating deficits and material declines in fund balances.
- A trend of decline in the ad valorem tax base resulting in weakened revenue stability, heightened budgetary pressure, and diminished capacity to support long-term capital needs and debt service obligations.
- Decreasing enrollment trend resulting from increased competition that erodes revenue generation and increases financial pressure on the District.
To access ratings and relevant documents, click here.
Methodologies
- Public Finance: U.S. Local Government General Obligation Rating Methodology
- ESG Global Rating Methodology
Disclosures
A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.
Information on the meaning of each rating category can be located here.
Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.
About KBRA
Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.
Doc ID: 1013318
Contacts
Analytical Contacts
Joe Plonski, Director (Lead Analyst)
+1 646-731-2353
[email protected]
Mallory Yu, Senior Analyst
+1 646-731-1380
[email protected]
Douglas Kilcommons, Managing Director (Rating Committee Chair)
+1 646-731-3341
[email protected]
Business Development Contacts
William Baneky, Managing Director
+1 646-731-2409
[email protected]
James Kissane, Senior Director
+1 646-731-2380
[email protected]
