Sept. 3, 2024 - The Comal Independent School District’s credit rating was upgraded to ‘AA+’ from ‘AA’ with a rating outlook of stable on August 8 by Fitch Ratings.
“This is extremely good news for Comal ISD taxpayers as it will allow the district to issue debt with lower overall costs,” says Glenn Graham, Comal ISD’s chief financial officer. “The higher the rating, the lower the interest rate in which Comal ISD will borrow funds. Over time this will save taxpayers several million dollars in interest costs.”
Fitch Ratings publishes credit ratings that are forward-looking opinions on the relative ability of an entity or obligation to meet financial commitments. The rating is based on several criteria such as fiscal management, long-term liability burdens, strong demographic and economic trends and levels of fund balance.
Comal ISD received the rating upgrade following a ratings call by Graham with Fitch Ratings of New York in anticipation of refinancing current callable bonds and issuing additional debt as authorized by voters in 2023.
The ‘AA+’ rating is just one step below the prime rating, or highest rating, on the Fitch rating scale which is ‘AAA - D.’
According to the press release issued by Fitch, “The ratings incorporate a robust financial resilience assessment of 'aaa' that reflects a low midrange of budgetary flexibility and assumes maintenance of unrestricted general fund reserves at least equal to 20 percent of spending and transfers out. The district is also aided by strong demographic and economic trend and level metrics.
“These positive credit factors are balanced against a very weak long-term liability burden composite (17th percentile, relative to Fitch's portfolio median) driven by moderately elevated levels of fixed carrying costs for debt service and retiree benefits, liabilities-to-governmental revenues of 316 percent and 9 percent liabilities-to-personal income ratio inclusive of upcoming expected debt issuance.”
This rating reflects how serious the Comal ISD Board of Trustees, administration and staff take their role of being responsible custodians of taxpayers’ monies. Furthermore, it is an indication that taxpayers can rest assured that Comal ISD delivers the best bang for its education buck.
Read the full Fitch Ratings press release here.