Press Release|Public Finance

KBRA Affirms Texas Tech University System RFS Bonds at AA+, Stable Outlook

3 Jul 2024   |   New York

Contacts

KBRA affirms the AA+, Stable Outlook on outstanding Texas Tech University System Board of Regents Revenue Financing System (RFS) bonds issued on behalf of Texas Tech University System ("the System"). RFS obligations issued under the Master Resolution 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.

Key Credit Considerations

The rating was affirmed because of the following 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 plans for debt issuance driven by capital-intensive nature of operations.

The Stable Outlook reflects KBRA’s expectation that System operating performance and liquidity will remain at or near current levels, with expected, future debt-funded capital projects supported by a commensurate increase in resources supporting repayment.

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.

To access rating and relevant documents, click here.

Methodologies

Disclosures

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

Doc ID: 1005011

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