NEW YORK–(BUSINESS WIRE)–#creditratingagency–KBRA assigns a long-term rating of AA+ to the City of Fort Worth, TX General Purpose Bonds, Series 2025 and Tax Notes, Series 2025. Concurrently, the long-term rating of AA+ is affirmed on the City’s outstanding General Purpose Bonds, Tax Notes, and Combination Tax and Revenue Certificates of Obligation. The Outlook is Stable.
Key Credit Considerations
The rating actions were 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.
- Heavy reliance on potentially volatile sales tax revenue exposes the General Fund revenue base to economic fluctuations.
- In addition to previously existing tax rate limitations and revenue caps, the recently passed TAD reappraisal plan could slow growth in residential property assessed values, impacting growth in General Fund property tax revenues.
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 economically sensitive tax revenues that is not sufficiently offset by permitted increases in property tax rates.
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: 1009401
Contacts
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Douglas Kilcommons, Managing Director
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Mallory Yu, Senior Analyst
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Douglas Kilcommons, Managing Director (Rating Committee Chair)
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