KBRA Assigns Ratings to City of Austin, TX Senior Lien Special Tax Revenue Bonds, Series 2026A (Convention Center Project) (AA-) and Junior Lien Special Tax Revenue Bonds, Series 2026B (Convention Center Project) (A+)

13 Jul 2026 | New York

KBRA assigns a long-term rating of AA- to the City of Austin, TX Senior Lien Special Tax Revenue Bonds, Series 2026A (Convention Center Project) and A+ to the City's Junior Lien Special Tax Revenue Bonds, Series 2026B (Convention Center Project). The rating Outlook is Stable.

Key Credit Considerations

The ratings were assigned because of the following key credit considerations:

Credit Positives

Rapidly growing Austin area economy provides strong basis for growth in pledged receipts.
Structuring of debt service requirements to be accommodated within pledged City HOT receipts without reliance on unproven PFZ Increment receipts.

Credit Challenges

Pledged City HOT receipts are vulnerable to recession, travel disruption, and changes in business and leisure demand, as demonstrated by the severe decline experienced during the pandemic.
Junior Bond security provisions are weak relative to the historic volatility of pledged receipts.

Rating Sensitivities

For Upgrade

Completion of the Convention Center on time and within budget followed by consistent growth in pledged receipts and widening debt service coverage.

For Downgrade

Sharp decline in pledged receipts due to severe economic contraction or event-based reduction in travel.
Significant construction delays, cost escalation, or additional borrowing beyond the current financing plan that materially increases leverage.

To access ratings and relevant documents, click here.

Methodology

Public Finance: U.S. Special Tax Revenue Bond Rating Methodology