Press Release|Public Finance

KBRA Assigns AAA Rating to Harris County, TX’s Permanent Improvement and Unlimited Tax Road Refunding Bonds, Series 2023A; Outlook is Stable

21 Jul 2023   |   New York


KBRA assigns a AAA Rating to Harris County, TX’s Permanent Improvement Refunding Bonds, Series 2023A and Unlimited Tax Road Refunding Bonds, Series 2023A. KBRA additionally affirms the long-term AAA rating for the County’s outstanding Tax and Subordinate Lien Revenue Certificates of Obligation. The rating Outlook is Stable.

Key Credit Considerations

The rating was assigned because of the following key credit considerations:

Credit Positives

  • Sizable and diversifying economy, centered around the nation’s fourth largest city, that has benefitted from above average property tax base growth.
  • Strong financial profile supported by generally favorable operations and considerable balance sheet resources, derived from stable property tax collections.
  • Robust financial management practices, including a comprehensive budgeting process, frequent intra-fiscal year monitoring, and the recent introduction of a funding (reserve) policy for the Contingency Fund.

Credit Challenges

  • Slightly elevated overall net debt burden when considering debt issued by various overlapping entities, which is partially offset by the County’s limited unfunded pension liability.
  • Susceptibility to significant storm activity given its domicile on Texas’s Gulf Coast, as evidenced by Hurricane Harvey and other tropical systems.

Rating Sensitivities

For upgrade

  • Not applicable for this rating level.

For downgrade

  • A sizable and sustained economic contraction for the County / Houston MSA.
  • A material and sustained degradation in operating reserves and available liquidity.

To access rating and relevant documents, click here.


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