DALLAS — Standard & Poor’s raised the general obligation credit of Coppell two notches to AAA from AA, as the North Texas suburb prepares to bring $26.5 million of debt to market next month.
Analysts said the upgrade reflects “very strong wealth and income levels and management’s maintenance of strong reserves that will likely allow the city to maintain its elevated financial condition even in the event of fiscal stresses.”
The city joins Richardson, Addison, Plano, and Irving as Dallas suburbs carrying triple-A ratings on GO debt. The state capital of Austin and tiny Bunker Hill Village are the only other Texas municipalities with the highest-possible rating. Richardson, Addison, and Bunker Hill Village, which is outside Houston, were elevated to the gilt-edged rating earlier this year.
Coppell officials managed to achieve operating surpluses the past six years, despite “growth pressures and an elevated debt-service carrying charge,” according to Standard & Poor’s. Following another surplus last year, the city’s unreserved general fund balance at the end of fiscal 2007 was $17.9 million, representing 47% of expenditures, or more than twice the mandated policy, analysts said.
Coppell’s fiscal 2007 taxable-assessed value of about $4.25 billion is up nearly 21% from five years earlier.
Director of finance Jennifer Miller said most of the gain is attributable to rising home values and new construction.
“We have limited space still available for new-home construction, but the homes that are being built are being sold for $750,000,” she said.
Miller said the city plans to sell $20 million of Series 2008A and $6.5 million of Series 2008B certificates of obligation Oct. 14.
First Southwest Co. is the financial adviser to the city and McCall, Parkhurst & Horton LLP is bond counsel.
“I am indeed pleased but not surprised by the upgrade in rating,” Coppell mayor Doug Stover said in a news release. “Our strong financial position is known by our staff and elected officials but this publicly recognizes our efforts. Our staff has excellent financial controls and our elected officials are great stewards of the taxpayers’ dollars.”
In August 2007, Moody’s Investors Service upgraded its rating on the city to Aa2 from Aa3 due to a sizable tax base that’s “experiencing solid commercial growth and is attracting individuals with high-wealth levels.”
Fitch Ratings doesn’t rate the city’s underlying credit.
Moody’s analysts said last year that the increased commercial activity occurred in Coppell over the past few years as areas zoned residential built out, with the convenient access to the Dallas-Fort Worth International Airport and major highways spurring the growth.
Coppell, which is just north of the airport, is roughly 20 miles northwest of downtown Dallas and 30 miles northeast of downtown Fort Worth.
The city’s estimated 2007 population of nearly 40,000 is 11% higher than the 2000 Census figure of 35,958. Coppell sits in the far northeast corner of Dallas County, which is also rated triple-A.
