KBRA assigns a AAA long-term rating with a Stable Outlook to Austin Independent School District’s (the "District") Unlimited Tax School Building Bonds, Series 2025 (PSF), and concurrently affirms the AAA long-term rating with a Stable Outlook for the District’s Unlimited Tax School Bonds (PSF) and Unlimited Tax School Bonds (Non-PSF) outstanding.

The Stable Outlook reflects KBRA’s expectation that management will continue to conservatively manage the District’s finances, that the tax base will continue to grow, and that the District’s overall net debt profile will remain moderate and well-managed as the District addresses its capital needs.

Key Credit Considerations

The rating actions reflect the following key credit considerations:

Credit Positives

• Large, diverse, and growing tax base provides reliable source of payment for the unlimited tax bonds.
• Strong financial management, policies, and procedures have historically sustained large unassigned reserves and strong liquidity.

Credit Challenges

• Declining enrollment and statutory changes to the State’s school funding system limit prospects for growth in operating resources and have contributed to recent budget deficits.

Rating Sensitivities

For Upgrade

• Not applicable at AAA rating level.

For Downgrade

• Failure to gradually restore structural balance coupled with depletion of reserves to a level inconsistent with the rating level.
• Continued reliance on non-recurring revenue sources to address budgetary shortfalls.
• While not expected a trend of decline in the ad valorem tax base may negatively impact the rating.

To access ratings and relevant documents, click here.

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: 1010621

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