KBRA Affirms Texas Tech University System RFS Bonds at AA+, Stable Outlook
3 Jul 2024 | New York
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.