KBRA Assigns AAA Rating to the Los Angeles Unified School District General Obligation Bonds, Series QRRUS (2026); Outlook Stable
9 Oct 2026 | New York
KBRA has assigned a long-term rating of AAA to the Los Angeles Unified School District (County of Los Angeles, California) General Obligation Bonds, Series QRRUS (2026) (Dedicated Unlimited Ad Valorem Property Tax Bonds). Concurrently, KBRA has affirmed the long-term rating of AAA on outstanding parity General Obligation Bonds of the District. The Outlook is Stable.
The long-term rating reflects the exceptionally strong security structure supporting repayment of the District’s General Obligation (“G.O.”) Bonds (the “Bonds”), together with the consistent performance and breadth of the Los Angeles Unified School District’s (“LAUSD” or the “District”) property tax base upon which ad valorem taxes pledged to the payment of debt service are levied. Because debt service is secured by an unlimited ad valorem property tax levied on taxable property within the District, KBRA’s analysis places predominant weight on these security features.
Key Credit Considerations
The rating actions reflect the following key credit considerations
Credit Positives
- A broad, diverse tax base with historically favorable trends in wealth, commercial activity, and property values provides a very strong source of GO debt repayment.
- Per consultation with external counsel, KBRA considers the bondholder protections afforded by the California constitution and state law to be robust.
- The statutory framework for school district accounting, fiscal monitoring and reporting outlined in AB 1200 is a key credit strength for California school districts.
Credit Challenges
- Assessed value growth is tempered by Proposition 13 of 1978 which limits the appreciation of existing residential property to the lesser of 2% or CPI in the absence of significant improvement or transfer in ownership.
Rating Sensitivities
For Upgrade
- Not applicable at the AAA rating level.
For Downgrade
- Material tax base erosion that necessitates a substantial increase in the tax rate required for payment of debt service.
- While not anticipated, legislative or judicial outcomes that are not in keeping with KBRA’s understanding of the protections afforded to G.O. bondholders by the security structure and by the statutory framework for school district bankruptcies in the State.
To access ratings and relevant documents, click here.