KBRA Assigns AAA Rating to Harris County Flood Control District, TX Improvement Refunding Bonds Series 2025, Contract Tax Refunding Bonds Series 2025A, and Outstanding Contract Tax Obligations; Affirms AAA Rating for Limited Tax Obligations

NEW YORK--(BUSINESS WIRE)--KBRA assigns a long-term rating of AAA for the Harris County Flood Control District, TX Improvement Bonds Refunding Bonds Series 2025, Contract Tax Refunding Bonds Series 2025A, and outstanding Contract Tax Obligations. Additionally, KBRA affirms the long-term rating of AAA for the District's Limited Tax Obligations. The rating Outlook is Stable.

Key Credit Considerations

The ratings actions reflect the following key credit considerations:

Credit Positives

• Sizable and diversifying economy, centered around the Nation’s fourth largest city, which has benefited from above average property tax base growth.
• Historically stable property tax collections through a variety of economic cycles, which KBRA believes demonstrates the area’s economic and tax base resilience.
• The County electorate in November 2024 approved a permanent increase in the O&M property tax levy for the Harris County Flood Control District that will provide an additional $100 million each year toward activities mitigating future flood risks and protecting the property tax base.
• Ample headroom between levied District Tax rate and the statutory maximum rate.

Credit Challenges

• Susceptibility to significant storm activity given its domicile on Texas’s Gulf Coast, as evidenced by Hurricane Harvey and other tropical systems, which have necessitated borrowing to bolster infrastructure resiliency.

Rating Sensitivities

For Upgrade

• Not applicable at AAA rating level.

For Downgrade

• A sizable and sustained economic contraction for the County / Houston-The Woodlands-Sugarland MSA, resulting in a material reduction in the tax base.

To access ratings and relevant documents, click here.

Methodologies

• Public Finance: General Property Tax/Assessment Revenue Methodology
• Public Finance: U.S. Local Government General Obligation Rating Methodology
• ESG Global Rating Methodology

Disclosures

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

Doc ID: 1010309