KBRA Assigns AA+ Rating, Stable Outlook to the City of Fort Worth, TX General Purpose Bonds, Series 2024 and Tax Notes, Series 2024
May 07 2024 - 3:48PM
Business Wire
KBRA assigns a long-term rating of AA+ to the City of Fort
Worth, TX General Purpose Bonds, Series 2024 and Tax Notes, Series
2024. Concurrently, KBRA affirms the long-term ratings of AA+ on
the City's General Purpose Bonds, Tax Notes, and Certificates of
Obligation (collectively, "the General Obligations"). The Outlook
is Stable.
Key Credit Considerations
The rating was assigned because of the following key credit
considerations:
Credit Positives
- Strong financial reserves and liquidity, bolstered by
conservative budgeting practices and formal fiscal policies.
- Vibrant economic growth, evidenced by a diverse and rapidly
growing tax base.
Credit Challenges
- Pension contributions remain below the ADC, and the funded
ratio of the City’s Retirement Fund remains low despite numerous
pension reforms enacted to date.
- Partial reliance on potentially volatile sales tax revenue
exposes the GF revenue base to economic fluctuations.
Rating Sensitivities
For Upgrade
- Tangible progress in addressing full funding of the actuarially
determined pension contribution.
For Downgrade
- Weakened financial flexibility due to lack of improvement or
worsening of pension funding metrics.
- Sustained reduction in tax revenues not sufficiently offset by
permitted increases in property tax rates.
To access rating 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) is a full-service credit
rating agency 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 by the Ontario
Securities Commission for issuers of asset-backed securities to
file a short form prospectus or shelf prospectus. KBRA is also
recognized by the National Association of Insurance Commissioners
as a Credit Rating Provider.
Doc ID: 1004238
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Analytical
Linda Vanderperre, Senior Director (Lead Analyst) +1
646-731-2482 linda.vanderperre@kbra.com
Douglas Kilcommons, Managing Director +1 646-731-3341
douglas.kilcommons@kbra.com
Mallory Yu, Senior Analyst +1 646-731-1380
mallory.yu@kbra.com
Karen Daly, Senior Managing Director (Rating Committee Chair) +1
646-731-2347 karen.daly@kbra.com
Business Development
William Baneky, Managing Director +1 646-731-2409
william.baneky@kbra.com
James Kissane, Senior Director +1 646-731-2380
james.kissane@kbra.com