S&P: Leander Independent School District, TX GO Debt Rating Raised To 'AA' On Robust Debt Plan
S&P Global Ratings also assigned its 'AAA' long-term rating to the district's series 2016A unlimited tax refunding bonds, reflecting its view of the district's eligibility for, and participation in, the Texas Permanent School Fund bond guarantee program, which provides the security of a permanent fund of assets the district can use to meet debt service on bonds guaranteed by the program. At the same time, the rating service assigned its 'AA' underlying rating for credit program on the district. The outlook on all ratings is stable.
"The higher rating reflects the district's implementation of a more robust planning framework to moderate its long-term exposure and reliance on capital appreciation bonds to fund growth-related capital needs," said S&P Global Ratings credit analyst Thomas Zemetis. "Although we consider the district's overall net debt profile and debt service levels to be high, in our view, the district demonstrates the willingness and capacity to institute revenue-raising practices, including over-levying the interest and sinking tax rate to retire debt earlier, lessening future debt service requirements. Furthermore, the district's school board set forth directives to reduce CABs to 25% of the district's overall debt portfolio by converting them to current interest bonds."
The long-term rating reflects S&P Global Ratings' view of the district's eligibility for, and participation in, the Texas Permanent School Fund (PSF) bond guarantee program, which provides the security of a permanent fund of assets that the district can use to meet debt service on bonds guaranteed by the program. (For more information on the program rating, please see our report on the Texas Permanent School Fund, published July 7, 2015, on RatingsDirect.)