KBRA Assigns AAA Rating to Various San Diego Unified School Districts GO Bonds; Affirms Rating for Outstanding GO Bonds
9 Apr 2026 | New York
KBRA assigns a long-term rating of AAA to the San Diego Unified School District: 2026 General Obligation Refunding Bonds (Dedicated Unlimited Ad Valorem Property Tax Bonds) (Election of 1998, Series R-9); 2026 General Obligation Refunding Bonds (Dedicated Unlimited Ad Valorem Property Tax Bonds) (Election of 2008, Series SR-6A); 2026 General Obligation Refunding Bonds (Dedicated Unlimited Ad Valorem Property Tax Bonds) (Election of 2008, Series SR-6B); and, 2026 General Obligation Refunding Bonds (Dedicated Unlimited Ad Valorem Property Tax Bonds) (Election of 2012, Series ZR-7). KBRA additionally affirms the long-term rating of AAA for the District's outstanding General Obligation Bonds. The rating Outlook is Stable.
Key Credit Considerations
The rating actions reflect the following key credit considerations:
Credit Positives
- Per consultation with KBRA external counsel, robust bondholder protections are afforded by California’s constitution and state law.
- Substantial and diverse tax base that continues to grow, with levy dedicated to debt repayment.
- Experienced management team, with demonstrated ability to manage challenges; augmented by significant state and county oversight and monitoring of District budgeting and fiscal reporting.
Credit Challenges
- Declining enrollment trend negatively impacts operating revenues.
- Limited operating revenue flexibility requires strong expenditure control to maintain financial health.
Rating Sensitivities
For Upgrade
- Not applicable at AAA rating level.
For Downgrade
- Significant tax base declines which would necessitate a substantial increase in the tax rate for debt service.
- A reduction in reserve levels below 2% of annual operating expenditures would erode financial flexibility and weaken credit strength.
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