Muenster Independent School District, TX GO Bonds Raised To 'A' On District's Strong Financial Performance Trend
Standard & Poor's Ratings Services raised its issuer credit rating on Muenster Independent School District, Texas' unlimited tax general obligation (GO) school building bonds to 'A' from 'BBB+' based on our view of the district's strong financial performance trend, as evidenced by very strong reserves and very limited capital needs. The outlook is stable.
At the same time, Standard & Poor's affirmed its 'AAA' program rating, with a stable outlook, on the district's parity GO debt.
The program rating assigned to the district's GO bonds reflects the district's eligibility for, and participation in, the Texas Permanent School Fund bond guarantee program, which provides the security of a permanent fund of assets that can be used to meet debt service on bonds guaranteed by the program.
In our opinion, the 'A' rating also reflects the district's stable enrollment, which has led to stable state support of operations and debt service; strong financial reserves, coupled with a trend of increasing reserves; and limited operating and enrollment pressures.
A factor that moderates these strengths is the district's shallow economy, which is concentrated in agriculture and the petrochemical industry.
The district's full faith and credit pledge secures the bonds.
"We expect that management will remain committed to the maintenance of strong reserve levels," said Standard & Poor's credit analyst Sarah Smaardyk. "We also expect that capital needs will remain limited and that the debt profile should remain low."
The 181-square-mile Muenster Independent School District serves an estimated population of 3,358. The district is located in Cooke County, near the Oklahoma border, about 80 miles north of Dallas, Texas and 15 miles west of Gainesville, Texas, which is the regional employment center. The district's local economy is based in agriculture and oil production; the district itself is the leading employer.
