Standard & Poor's Ratings Services said it raised its school issuer credit rating to A-plus from A on Donna Independent School District, Texas' existing general obligation debt.
In addition, it assigned its A-plus ICR and AAA enhanced program rating to the district's series 2013 unlimited tax refunding bonds. Standard & Poor's Ratings Services also affirmed its AAA enhanced rating on the district's GO bonds outstanding. The outlook on both ratings is stable.
"The upgrade is based on the district's significantly improved financial performance and reserve levels," said Standard & Poor's credit analyst Kate Choban.
The enhanced rating reflects the strength and liquidity of the Texas Permanent School Fund.
The ICR reflects the district's: steady assessed valuation growth, very strong financial position, and significant state support for operations and debt service.
The district's credit profile is constrained by its shallow economic base coupled with lower-than-average wealth and income indicators.
The bonds are secured by a continuing direct annual ad valorem tax levied by the district without legal limit as to rate or amount on all taxable property within the district. Bond proceeds will be used to refund a portion of the district's existing debt for interest rate savings.
Donna Independent School District, with a population estimate of 50,000, is in south Texas' Rio Grande Valley, along the Mexican border. The local economy is centered on tourism, agriculture, and trade with Mexico.