Standard & Poor's Ratings Services said it has raised its long-term and underlying ratings on Dallas County Utility and Reclamation District, Texas' general obligation debt one notch to A-minus from BBB-plus.
The outlook is stable.
"We base the upgrade on the substantial increase in the district's healthy property tax base, which has resulted in moderation of debt burden," said Standard & Poor's credit analyst Ann Richardson.
The ratings reflect the district's: central location in the Las Colinas development; healthy and growing property tax base, along with taxpayers' support for the previous restructurings; and completed development, limiting future capital needs requiring the issuance of additional debt.
Factors limiting a higher rating are: high overall net debt burden and high direct tax rate.
The bonds are secured by an unlimited ad valorem tax levied on all taxable property within the district.
Dallas County Utility and Reclamation District, created in 1972, provides infrastructure and flood control to 3,500 acres within the 12,000-acre Las Colinas mixed-use development in Irving, Texas. The district has attracted a number of major property owners and tenants, many of which have corporate or regional headquarters in the district due to its key location near Dallas-Fort Worth International Airport.
The stable outlook reflects Standard & Poor's expectation the district will remain a prominent business location in the Dallas-Fort Worth metropolitan statistical area and that the district's completed development would allow it to continue to sustain its adequate financial position.
While the agency does not view it as likely to occur within the two year-outlook horizon, if there is a material increase in the overall debt burden without sufficient property tax base growth, it could lower the rating. It could raise the rating if the debt burden moderates substantially.
