Harris County MUD No. 196 (A2) benefits from a moderately sized, but mature tax base that has continued to record growth despite flooding from Hurricane Harvey that affected approximately 29% of the homes within the district. Additionally the district benefits from stable operations with healthy albeit, below the median, reserve levels that are expected to improve in the near term. The district is challenged by an elevated debt burden with a slow principal payout.

We regard the coronavirus outbreak as a social risk under our ESG framework, given the substantial implications for public health and safety. We do not see any material immediate credit risks for Harris County MUD 196. However, the situation surrounding coronavirus is rapidly evolving and the longer term impact will depend on both the severity and duration of the crisis. If our view of the credit quality of Harris MUD 196 changes, we will update our opinion at that time.