KBRA Affirms AAA Rating with Stable Outlook for Township of East Goshen, PA - G.O.
9 Sep 2026 | New York
KBRA affirms the long-term rating of AAA with a Stable Outlook for the East Goshen Municipal Authority's (the Authority's) Guaranteed Sewer Revenue Notes (the Guaranteed Notes), which are guaranteed by the Township of East Goshen's (the Township's) full faith, credit, and unlimited tax pledge. As a result, KBRA's rating is based solely on the Township's general obligation credit.
The long-term rating for the Authority’s Guaranteed Notes reflects the strengths inherent to the Township’s general obligation pledge, as well as the Township’s effective management structure, very affordable debt and continuing obligations profile, strong underlying tax base, and ample reserves which provide considerable financial flexibility. While the General Fund (GF) is somewhat dependent on earned income taxes which can experience volatility, this concentration is very manageable given to the depth of reserves.
The Guaranteed Notes are payable from lease payments received by the Authority from the Township pursuant to a lease agreement requiring monthly payments equal to monthly debt service on outstanding Guaranteed Notes. Lease payments are payable first from revenues of the Township’s Sewer Fund, supported by a guarantee of the Township ’s full faith, credit, and unlimited tax pledge. Under the guarantee agreement, if Sewer Fund revenues are insufficient to fully pay debt service, the Township is required to make up the deficiency.
The Stable Outlook reflects KBRA’s expectation that the Township will continue to achieve structurally balanced operations while preserving solid unassigned General Fund reserves and liquidity. The Outlook also assumes that the Authority will continue to pay debt service on the Guaranteed Notes without assistance from the Township.
Key Credit Considerations
The rating was affirmed because of the following key credit considerations:
Credit Positives
- Strong financial management policies and procedures, which include monthly financial reporting.
- Stable underlying tax base with good commuter access to large, diverse employment centers, supporting high income and wealth levels.
- High level of financial flexibility afforded by ample reserve levels.
Credit Challenges
- General Fund revenue base is somewhat dependent on earned income taxes.
Rating Sensitivities
For Upgrade
- Not Applicable.
For Downgrade
- Trend of GF operating deficits leading to sustained deterioration in reserve levels.
- Increase in debt burden or significant changes to the Township’s tax base.
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