Grand Prairie, Texas, Raised to AAA by S&P

Standard & Poor's Ratings Services said it raised its underlying rating on the city of Grand Prairie, Texas' general obligation debt to AAA from AA-plus.

Standard & Poor's also assigned its AAA rating to Grand Prairie's series 2013 GO refunding and improvement bonds and series 2013 combination tax and revenue certificates of obligation. The outlook on all the ratings is stable.

"The rating action reflects our view of Grand Prairie's consistent ability to support an expanding economic base amid major recessionary periods while maintaining historically very strong reserves," said Standard & Poor's credit analyst Kate Choban.

The ratings reflect the general credit characteristics of the city, including its: favorable location in between Dallas and Fort Worth and along several major interstate highways, providing not only good access throughout the metropolitan statistical area, but also allowing the city to serve as a regional employment hub ;historically very strong financial position, coupled with strong management, evidenced by consistently high reserves, a stable tax rate, and institutionalized policies; and, continued growth and diversification of its employment base as well and ongoing plans to improve transportation infrastructure.

Offsetting these strengths is the city's moderately high overall debt levels as a percent of market value, although a large portion of its overall debt reflects overlapping entities, including several local school districts.

The bonds and certificates are secured by a direct and continuing ad valorem tax levied on all taxable property in the city. Certificate proceeds are additionally secured by a limited pledge of $2,500 of the net revenues of the city's water and wastewater system. Grand Prairie intends to use the bond proceeds to refund a portion of its existing debt for interest rate savings and to construct, finance, and improve streets, police and fire-fighting facilities and equipment, and other public safety improvements. Certificate proceeds will be used to finance the construction of street improvements and municipal park, recreational, police, fire-fighting, and library facilities, and for acquiring vehicles.

Grand Prairie, with an estimated population of about 179,476, occupies approximately 80 square miles in Dallas, Tarrant, and Ellis counties at almost the geographic center between Dallas and Fort Worth.

"The stable outlook reflects our expectation that the city's economy will continue to grow and diversify, and that Grand Prairie will maintain its strong financial management policies and a very strong financial position," added Choban.

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