KBRA Assigns Round Rock Independent School District’s (TX) Series 2026AB Unlimited Tax and Variable Rate Unlimited Tax School Building Bonds AAA and Affirms Unlimited Tax Obligations at AAA; Outlook Stable

NEW YORK--(BUSINESS WIRE)--KBRA assigns a long-term rating of AAA to Round Rock Independent School District's (the "District's" or "RRISD's") Series 2026A and Series 2026B Unlimited Tax School Building Bonds and Variable Rate Unlimited Tax School Building Bonds, respectively. Additionally, KBRA affirms the District's outstanding unlimited tax obligations at AAA. The Rating Outlook is Stable for the new and existing unlimited tax obligations.

Key Credit Considerations

The rating actions reflect the following key credit considerations:

Credit Positives

• A diverse and growing tax base providing a reliable source of payment for the unlimited tax bonds.
• Sizeable recapture payments were not required in FY 2025, narrowing the District’s general fund (GF) budget gap, with the potential to move back to structural GF balance in FY 2026, following the Texas Education Agency's impending update of the State funding calculation.
• Strong financial management, policies, and procedures have supported sound unassigned reserves and liquidity.

Credit Challenges

• A trend of declining-to-flat enrollment in recent years, combined with statutory changes to the State’s school funding system have limited prospects for growth in operating resources.

Rating Sensitivities

For Upgrade

• Not applicable at the current rating level.

For Downgrade

• Failure to achieve structural GF balance through alignment of expenditures to resources, resulting in a depletion of reserves to levels no longer commensurate with the rating.
• Declining trend in the ad valorem tax base.

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: 1013352