S&P: Harris County Municipal Utility District No. 238, TX Outlook Revised To Positive On Tax Base Growth, Waning Debt Ratios
At the same time, S&P Global Ratings assigned its 'A-' long-term rating and positive outlook to the district's $6.5 million series 2016 unlimited-tax GO refunding bonds and affirmed its 'A-' long-term rating and SPUR on the district's existing GO debt.
The outlook revision reflects S&P Global Ratings' opinion of the MUD's ongoing property tax base growth and declining debt-to-assessed-value ratios.
"We believe there is at least a one-in-three chance we could raise the rating within the next two years if the MUD were to sustain the recent improvements to its debt-to-assessed-value ratios while it reduces the direct tax rate further," said S&P Global Ratings credit analyst Stephen Doyle. "Although unexpected, we could revise the outlook to stable if additional bonding were to outpace the rate of tax base growth or if finances were to deteriorate substantially."
The bonds are payable from an unlimited ad valorem tax levied on all taxable property within the MUD.
Officials intend to use series 2016 bond proceeds to refund the MUD's debt for savings.