Press Release|Public Finance
KBRA Assigns AA+ Rating to City of Pflugerville, TX Combination Tax and Limited Revenue Certificates of Obligation, Series 2025 and Limited Tax Bonds, Series 2025; Affirms Ratings for Parity Bonds
31 Mar 2025 | New York
KBRA assigns a long-term rating of AA+ to the City of Pflugerville, TX Combination Tax and Limited Revenue Certificates of Obligation, Series 2025 and Limited Tax Bonds, Series 2025. KBRA also affirms the long-term rating of AA+ for the City's outstanding Combination Tax and Limited Revenue Certificates of Obligation and Limited Tax Bonds. The rating Outlook is Stable.
Key Credit Considerations
The rating actions reflect the following key credit considerations:
Credit Positives
- Strong financial operating performance, reflecting somewhat conservative financial management policies and procedures, strong reserve levels, and solid unrestricted liquidity.
- Favorable local economic base, coupled with commutable proximity to Austin and a rapidly growing taxable base.
Credit Challenges
- Property tax levy limitations could adversely impact expenditure flexibility.
- Partial reliance on economically sensitive sales tax receipts to fund operations.
- Elevated overall net debt burden when measured on a per capita basis.
- Substantial infrastructure investments are needed to accommodate rapid ongoing economic growth.
Rating Sensitivities
For Upgrade
- The continued realization of robust tax base and revenue growth.
- Continued favorable financial operating performance further bolstering reserve levels and liquidity.
- A decline in the City’s overall net debt burden and anticipated borrowing needs.
For Downgrade
- An erosion in reserves or unrestricted liquidity to levels no longer commensurate with the assigned rating.
- Significant increase in debt metrics that is not balanced by continuing growth in the tax base.
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