For the first time since 2015, the Dallas Independent School District (Dallas ISD) received a rating increase by Standard & Poor’s (S&P) Global to AA+, one notch below the highest possible rating. The district previously held steady at a AA rating over the last four years.
Additionally, S&P Global Ratings assigned its ‘AAA’ long-term and ‘AA+’ underlying ratings to Dallas ISD’S unlimited-tax school building bonds, series 2019.
“The rating is confirmation of the strong financial condition, district leadership and overall market outlook for the Dallas community,” said Dwayne Thompson, chief financial officer for Dallas ISD. “The stronger rating provides additional confidence to the investor, which in turn results in lower interest rates and savings for our tax payers.”
In their latest report, the upgrade reflects S&P’s belief that Dallas ISD has a stable financial operation, which includes building a stronger reserve by being good stewards of taxpayer dollars through strategic measures. The rationale for the increase is also affirmed by good management, with strong financial practices and policies that, in turn, support very strong reserves and balanced fiscal practices.
Dallas ISD has $3.7 billion in general obligation (GO) unlimited-tax debt and $143 million in GO limited-tax debt outstanding and the outlook on all ratings remains stable.
The ‘AA+’ rating is a result of:
• Large and diversified economy, with strong AV growth, as evidenced by the 9% increase for fiscal 2020;
• Adequate income and good wealth levels;
• Very strong market value per capita of $116,032;
• Very strong finances, with sizable surpluses in fiscal years 2018 and 2019; and
• Moderate 4.4% overall net debt as percentage of market value.
In addition, Dallas ISD’s underlying ratings of ‘AA1’ by Moody’s and ‘AA+’ by Fitch were also affirmed by these respective ratings agencies, and both with a stable outlook. These ratings are also one level below AAA, the highest debt rating available from all three agencies.