Press Release|Public Finance
KBRA Assigns AA+ Rating, Stable Outlook to the City of Fort Worth, TX General Purpose Bonds, Series 2025 and Tax Notes, Series 2025
13 May 2025 | New York
KBRA assigns a long-term rating of AA+ to the City of Fort Worth, TX General Purpose Bonds, Series 2025 and Tax Notes, Series 2025. Concurrently, the long-term rating of AA+ is affirmed on the City's outstanding General Purpose Bonds, Tax Notes, and Combination Tax and Revenue Certificates of Obligation. The Outlook is Stable.
Key Credit Considerations
The rating actions were assigned because of the following key credit considerations:
Credit Positives
- Strong financial reserves and liquidity, bolstered by conservative budgeting practices and formal fiscal policies.
- Vibrant economic growth, evidenced by a diverse and rapidly growing tax base.
Credit Challenges
- Pension contributions remain below the ADC, and the funded ratio of the City’s Retirement Fund remains low despite numerous pension reforms enacted to date.
- Heavy reliance on potentially volatile sales tax revenue exposes the General Fund revenue base to economic fluctuations.
- In addition to previously existing tax rate limitations and revenue caps, the recently passed TAD reappraisal plan could slow growth in residential property assessed values, impacting growth in General Fund property tax revenues.
Rating Sensitivities
For Upgrade
- Tangible progress in addressing full funding of the actuarially determined pension contribution.
For Downgrade
- Weakened financial flexibility due to lack of improvement or worsening of pension funding metrics.
- Sustained reduction in economically sensitive tax revenues that is not sufficiently offset by permitted increases in property tax rates.
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