Moody’s Investors Service has upgraded the City of Stafford, TX’s issuer and general obligation limited tax (GOLT) ratings to A2 from A3. Moody’s Investors Service has also upgraded the Stafford Economic Development Corporation (EDC), TX's Sales Tax Revenue Refunding Bonds, Series 2014 rating to A2 from A3.
The upgrade of the issuer rating to A2 reflects the city’s significantly improved financial position as a result of conservative budgeting practices leading to consecutive years of surplus operations. Governance is a key driver of the rating reflecting a new management team and the implementation of new financial policies adopted by the city council leading to the city’s improved financial position. The rating also considers ongoing commercial development and continued tax base growth as well as a manageable long-term liabilities ratio. These positive attributes are balanced by the city’s reliance on economically sensitive sales tax revenues and a history of deficit operations.
The rating upgrade to A2 reflects recent strong sales tax performance supported by the city’s growing tax base which has led to strong debt service coverage levels and improved liquidity within the EDC. The rating also considers the EDC’s relationship with the City of Stafford as a component unit and the city’s recent upgrade to A2. Pledged revenues have remained resilient over the past several years, though could moderate given the current economic climate.
Moody's Credit Opinion - City of Stafford
Moody's Credit Opinion - Stafford Economic Development Corporation (SEDC)