KBRA Assigns Texas Tech University System Bonds AA+, Stable Outlook
7 Jul 2023 | New York
KBRA assigns a AA+, Stable Outlook to Texas Tech University System Board of Regents Revenue Financing System ("RFS") Refunding and Improvement Bonds Series 2023A and RFS Taxable Improvement Bonds Series 2023B to be issued on behalf of the Texas Tech University System. Concurrently, KBRA assigns a AA+, Stable Outlook to outstanding, parity RFS Bonds previously issued by the Board on the System's behalf. RFS Obligations issued under the Master Resolution, including the Series 2023A and Taxable Series 2023B Bonds, are payable from and solely secured by Pledged Revenues of the RFS System. Pledged Revenues consist of Revenue Funds, including all unencumbered funds and balances legally available to the Board.
A Rating Report will follow.
Key Credit Considerations
Credit Positives
- Solid finances, characterized by substantial liquidity, diverse funding, and typically balanced operations.
- Healthy student demand, driven by an expansive operation that includes academic and health institutions.
- Highly experienced leadership.
Credit Challenges
- On-going need for debt driven by capital-intensive nature of operations.
Rating Sensitivities
For Upgrade
- Strengthened financial performance and liquidity, providing enhanced financial flexibility.
For Downgrade
- While not expected, a significant increase in leverage that strains the RFS security pledge and structure.
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