Standard & Poor's Ratings Services said it raised its long-term rating to A-plus from A on Pharr, Texas' general obligation bonds.
At the same time, Standard & Poor's assigned its A-plus rating to the city's series 2015A combination tax and international bridge revenue refunding bonds and the series 2015B GO refunding bonds. The outlook on all ratings is stable.
"The upgrade reflects our opinion of the city's very strong budgetary flexibility and growing economy," said Standard & Poor's credit analyst Ann Richardson.
The series 2015A bonds are pledged and payable from a combination of the levy and collection of a direct and continuing ad valorem tax, within the limits prescribed by law, on all taxable property within the city and a first lien on the pledge of net revenues of the city's international toll bridge system.
The series 2015B bonds are payable from a continuing ad valorem tax levied on all property within the limits prescribed by law. The maximum allowable rate in Texas is $2.50 per $100 of assessed value (AV) for all purposes, with the portion dedicated to debt service limited to $1.50. The city's levy is well below the maximum, at 68 cents, 7.19 cents of which is dedicated to debt service.
Given the nature of both securities and that the city is well below its maximum taxing authority, it rates the bonds based on the city's general obligation. Proceeds from the sale of both series will be used to refund a portion of the city's debt outstanding for debt service savings.
