Press Release|Public Finance
KBRA Affirms AAA Rating for Indianapolis Local Public Improvement Bond Bank Bonds, Series 2022C (Stormwater Project) (Green Bonds)
7 Feb 2024 | New York
KBRA affirms the long-term rating of AAA for the Indianapolis Local Public Improvement Bond Bank Bonds, Series 2022C (Stormwater Project) (Green Bonds). The Outlook is Stable. The bonds are secured by a pledge of net system revenues of the Marion County Stormwater Management District ("the District").
A rating report will follow.
Key Credit Considerations
The rating was affirmed because of the following key credit considerations:
Credit Positives
- The Stormwater User Fee funds essential stormwater management and mitigation initiatives, across a large, growing population and a strong, diverse employment base.
- The current fee structure is highly affordable as the average annual residential bill is less than 0.1% of the City and the County’s 2022 personal income per capita.
- Excellent liquidity position, with DCOH consistently above 600 days in the last five years allowing for operational flexibility.
Credit Challenges
- Though largely mitigated by other structural strengths, the transaction does not benefit from a debt service reserve fund and the ABT of 1.25x is considered adequate.
Rating Sensitivities
For upgrade
- Not applicable given AAA rating level.
For downgrade
- Significant decline in DSCR due to very large increases in debt issuances accompanied by significant and prolonged deterioration in the underlying Stormwater User Fee and collection rate.
- Deterioration in the economic base which pressures the District’s ability to collect and maintain the Stormwater User Fee revenue at a level sufficient to support future stormwater program costs.
To access rating and relevant documents, click here.