Standard & Poor's Ratings Services raised its rating on Denton, Texas' outstanding general obligation debt and certificates of obligation one notch to AA-plus from AA.
At the same time, Standard & Poor's assigned its AA-plus rating to the city's series 2015 GO refunding and improvement bonds and series 2015 certificates of obligation. The outlook on all issues is stable.
"The raised rating reflects our opinion of the city's ongoing economic growth, maintenance of a strong financial profile, and our revised assessment of the city's retiree costs relative to the size of its budget after adjusting for the share attributed to its electric utility system," said Standard & Poor's credit analyst Omar Tabani.
The city will use the 2015 GO bonds to refund existing debt for savings, and to fund various voter-approved capital projects. The 2015 certificates of obligation will be used to fund additional capital projects that are not part of the city's voter-approved bond program.
"While not expected within the next two years, we could raise the rating if ongoing economic growth results in substantially improved income and wealth levels, or if the city's debt profile materially improves," Tabani added. "Conversely, while also not expected, we could lower the rating if the city experiences any substantial economic or financial deterioration."
Denton is located in Denton County, roughly 35 miles from downtown Dallas and Fort Worth.
