KBRA assigns a long-term rating of AAA to Round Rock Independent School District's (the "District" or "RRISD") Series 2025C Unlimited Tax Refunding Bonds. Additionally, KBRA affirms the District's outstanding unlimited tax obligations at AAA. The Rating Outlook is Stable for the new and existing unlimited tax obligations (collectively, the "Bonds").
Key Credit Considerations
The rating actions reflect the following key credit considerations:
Credit Positives
- Diverse and growing tax base that provides a reliable source of payment for the unlimited tax bonds.
- Plan to balance the general fund budget going forward via cost reductions as needed, rather than rely on general fund reserves.
- Strong financial management, policies, and procedures have historically supported strong unassigned reserves and liquidity.
Credit Challenges
- Trend of declining enrollment in recent years, combined with statutory changes to the State’s school funding construct have limited prospects for growth in operating resources.
Rating Sensitivities
For Upgrade
- Not applicable at the current rating level.
For Downgrade
- Declining trend in the ad valorem tax base.
- Failure to achieve structural general fund balance through alignment of expenditures to available funding.
- Drawdown of the unassigned general fund balance to a level, relative to the general fund expenditures, no longer commensurate with the current rating level.
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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: 1011894
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Contacts
Analytical Contacts
Lina Santoro, Director (Lead Analyst)
+1 646-731-1419
lina.santoro@kbra.com
Mallory Yu, Senior Analyst
+1 646-731-1380
mallory.yu@kbra.com
Douglas Kilcommons, Managing Director (Rating Committee Chair)
+1 646-731-3341
douglas.kilcommons@kbra.com
Business Development Contacts
William Baneky, Managing Director
+1 646-731-2409
william.baneky@kbra.com
James Kissane, Senior Director
+1 646-731-2380
james.kissane@kbra.com