New York, April 08, 2016 -- Issue: Travis County, Texas, Certificates of Obligation, Series 2016 (Limited Tax); Rating: Aaa; Rating Type: Underlying LT; Sale Amount: $42,095,000; Expected Sale Date: 04/19/2016; Rating Description: General Obligation Limited Tax;
Issue: Travis County, Texas, Permanent Improvement Bonds, Series 2016 (Limited Tax); Rating: Aaa; Rating Type: Underlying LT; Sale Amount: $8,875,000; Expected Sale Date: 04/19/2016; Rating Description: General Obligation Limited Tax;
Issue: Travis County, Texas, State Highway System Bonds, Series 2016 (Limited Tax); Rating: Aaa; Rating Type: Underlying LT; Sale Amount: $14,030,000; Expected Sale Date: 04/19/2016; Rating Description: General Obligation Limited Tax;
Issue: Travis County, Texas, Unlimited Tax Road Bonds, Series 2016; Rating: Aaa; Rating Type: Underlying LT; Sale Amount: $25,110,000; Expected Sale Date: 04/19/2016; Rating Description: General Obligation;
Summary Rating Rationale
Moody's Investors Service has assigned a Aaa underlying rating to Travis County's, TX, $42.09 million Certificates of Obligation Series 2016, $8.87 million Permanent Improvement Bonds Series 2016, $14.03 million State Highway System Bonds Series 2016, and $25.11 million Unlimited Tax Road Bonds Series 2016. At the same time we have affirmed the Aaa rating on parity limited and unlimited tax debt outstanding. The outlook is stable.
The Aaa rating reflects the county's large and diverse tax base that benefits from a growing population, as well as institutional presence provided by government employment and a large university. The rating also takes into consideration a history of stable financial performance, adherence to strong and prudent fiscal management practices to ensure financial stability and maintenance of healthy reserve levels, and a manageable debt and pension profile.
The stable outlook reflects expected near-term double digit growth in full value which is driven by an estimated $3.28 billion in new market value, as well as continued stable financial performance and metrics which is bolstered by growing revenue streams.
Factors that Could Lead to an Upgrade
Factors that Could Lead to a Downgrade
Poor financial performance leading to a significant decline in reserve levels
Significant increase in debt profile without corresponding tax base growth
Trend of significant declines in taxable values
Inability to manage rising OPEB costs
The Certificates, Highway Bonds, and Permanent Improvement Bonds are payable from receipts of a separate, direct and continuing annual ad valorem tax levied, within the limits prescribed by law, on all taxable property within the county. The Certificates are additionally secured by and payable from a limited pledge of the surplus revenues of the county's solid waste disposal system. The Road Bonds are payable from the receipts of a separate, direct and continuing annual ad valorem tax levied, without limitation as to rate or amount, on all taxable property within the county.
Use of Proceeds
Proceeds from the current issuances will fund various transportation, park, infrastructure, facility projects throughout the county.
The County is located in central Texas (Aaa stable) and is home to the City of Austin (Aaa stable), the state capital. The county is roughly 1,022 square miles and the current population estimate is 1,209,415.
The principal methodology used in this rating was US Local Government General Obligation Debt published in January 2014. Please see the Ratings Methodologies page on www.moodys.com for a copy of this methodology.
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Regional PFG Dallas
Moody's Investors Service, Inc.
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Lauren Von Bargen
Regional PFG Northeast
Moody's Assigns Aaa to Travis County's, TX, Various GOLT and GO Series 2016; Outlook is Stable
Moody's Investors Service, Inc.
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