KBRA Assigns AAA Rating and Stable Outlook to the City of Indianapolis, Indiana, General Obligation Bonds

NEW YORK--(BUSINESS WIRE)--KBRA assigns a AAA long-term rating to the City of Indianapolis, Indiana, General Obligation Bonds Series 2022A and Series 2022B (taxable) issued through the Indianapolis Local Public Improvement Bond Bank. The Outlook is Stable.

Key Credit Considerations

The rating was assigned because of the following key credit considerations:

Credit Positives

• The region’s expanding economy and increasing employment levels foster population gains and a growing resource base.
• Strong fiscal controls and a multi-year budgeting process leads to consistently balanced operations and maintenance of strong reserves well above policy minimums, resulting in significant financial flexibility.
• The City’s modest debt levels and unfunded pension liabilities result in low fixed costs, easing budgetary pressure.

Credit Challenges

• Indiana’s circuit breaker property tax cap presents revenue-raising constraints.
• The City’s demographics exhibit relatively low income per capita and an above average poverty rate, partially reflecting a large student population.

Rating Sensitivities

For Upgrade:

• Not applicable

For Downgrade:

• Significant drawdown of reserves, including the Fiscal Stabilization Fund, below policy minimums without a plan for replenishment within a reasonable period.
• An unexpected increase in capital needs and borrowing, or failure to maintain pension funding levels, either of which results in a material increase in long-term fixed costs.
• Poor performance of tax increment finance districts backed by the City’s moral obligation, resulting in an unexpected need to fund contingent obligations and budgetary stress.

To access ratings and relevant documents, click here.

Methodologies

• 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: 1010802