Standard & Poor's Ratings Services said it raised its long-term and underlying rating to AA from AA-minus on South Texas College District, Texas' existing general obligation bonds.
At the same time, Standard & Poor's assigned its AA long-term rating to the district's series 2014 limited tax GO bonds. The outlook on all ratings is stable.
"The raised rating reflects our view of the district's successful operational tax rate referendum in fall 2013," said Standard & Poor's credit analyst Jennifer Garza. "This gives the district more operational revenue capacity to counteract the capital and operational pressures that have come with its rapid growth," Garza added.
Officials will use bond proceeds to fund the first phase of the November 2013 voter authorized bond program. The $159 million bond program will finance expansion of facilities at all five campuses to accommodate growth.
South Texas College District, with a population of 926,693, was formed in 1993 and is coterminous with Hidalgo and Starr counties. The district's area within the state includes McAllen, Edinburg, and Mission, in the Rio Grande Valley, which is dependent on agriculture, petroleum, tourism, and trade with Mexico for much of its economic activity.
