NEW YORK–(BUSINESS WIRE)–#creditratingagency–KBRA assigns a long-term rating of AA to the Needville Independent School District, TX Series 2026 Unlimited Tax School Building and Refunding Bonds. Concurrently, KBRA assigns a long-term rating of AA to outstanding parity lien Unlimited Tax School Building Bonds. The rating Outlook is Stable.
The Stable Outlook reflects KBRA’s expectation that management will continue to conservatively manage the District’s finances to maintain healthy general fund unassigned reserves, the property tax base will continue to grow, and that the District’s debt profile will remain manageable as the District addresses its capital needs.
Key Credit Considerations
Credit Positives
- Diverse and rapidly growing tax base provides a reliable source of repayment for the Bonds.
- Substantial general fund unassigned reserves and cash position provide strong financial support and flexibility.
- Timely execution of a large capital plan, within budget, to support a growing student base.
- Strong projected enrollment growth, with several new residential developments planned in the District’s area through 2028, helping to fortify operating performance and unassigned reserves going forward.
Credit Challenges
- Large capital plan through FY 2028 which places pressure on the District’s debt burden and fixed costs.
- Limited flexibility to generate additional resources based on property tax rate and State school funding restrictions.
Rating Sensitivities
For Upgrade
- Significant growth and diversification of the tax base beyond projected level.
For Downgrade
- A trend of decline in the ad valorem tax base and/or decreasing enrollment resulting in general fund deficits and an erosion of reserve levels.
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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: 1015206
Contacts
Analytical Contacts
Lina Santoro, Senior Director (Lead Analyst)
+1 646-731-1419
[email protected]
Peter Scherer, Senior Director
+1 646-731-2325
[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]
