KBRA assigns a long-term rating of AAA to the Indianapolis Local Public Improvement Bond Bank Revenue and Refunding Bonds, Series 2024F (Stormwater Project) and affirms the long-term rating of AAA on the outstanding parity Series 2022C (Stormwater Project) (Green Bonds). The Rating Outlook is Stable for both series. The bonds are secured by a pledge of net system revenues of the Marion County Stormwater Management District ("the District").

Key Credit Considerations

The rating actions reflect the following key credit considerations:

Credit Positives

• The Stormwater User Fee funds essential stormwater management and mitigation initiatives across a large, growing population and a strong, diverse employment base.
• The current fee structure is highly affordable as the average annual residential bill is less than 0.1% of the City and the County’s 2022 personal income per capita.
• Excellent liquidity position, with days cash on hand consistently measuring approximately 600 days in the last five years allowing for operational flexibility.

Credit Challenges

• Though largely mitigated by other structural strengths, the transaction does not benefit from a debt service reserve fund and the additional bonds test of 1.25x is considered adequate.

Rating Sensitivities

For Upgrade

• Not applicable given the AAA rating level.

For Downgrade

• Significant decline in debt service coverage due to very large increases in debt issuances accompanied by significant and prolonged deterioration in the underlying Stormwater User Fee and collection rate.
• Deterioration in the economic base, which pressures the District’s ability to collect and maintain the Stormwater User Fee revenue at a level sufficient to support future stormwater program costs.

To access rating and relevant documents, click here.

Methodologies

• Public Finance: U.S. Special Tax Revenue Bond 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: 1006073

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