KBRA Assigns AA+ Rating to Travis County Hospital District’s (TX) Series 2025 (Limited Tax) Certificates of Obligation (“COs”) and Affirms Outstanding Parity COs at AA+; Stable Outlook

KBRA assigns a long-term rating of AA+ to Travis County Hospital District's (the "District's") Series 2025 (Limited Tax) Certificates of Obligation ("COs") and affirms outstanding parity COs at AA+, all with a Stable Outlook. The Certificates are payable from receipts of a separate, distinct and continuing ad valorem tax levied, within the limits prescribed by law, on all taxable property within the District.

Key Credit Considerations

The rating was assigned and affirmed because of the following key credit considerations:

Credit Positives

• Strength and diversity of the District’s large and growing tax base.
• Solid legal framework supporting the Certificates’ repayment.
• District’s ad valorem tax rate remains considerably below the voter-approved tax levy limit, although narrowing.

Credit Challenges

• Capital needs associated with expanding healthcare services and facilities, including the provision of direct care in select specialties.
• Challenges inherent to servicing an indigent population that is largely uninsured and underinsured.

Rating Sensitivities

For Upgrade

• Material growth in the property tax base, which supports the District’s revenues and bolsters the taxing capacity within the voter-approved tax limit.
• Consistent maintenance of costs below expectations which mitigates the overall tax levy, as the District continues to expand its network of healthcare providers and provision of specialty care services.

For Downgrade

• Sharp secular deceleration in tax base growth pressuring organic growth of ad valorem tax support.
• Material decline in headroom under the existing ad valorem tax limit.

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Methodologies

• Public Finance: General Property Tax/Assessment Revenue Methodology
• Public Finance: U.S. Not-For-Profit Healthcare Rating Methodology
• ESG Global Rating Methodology

Disclosures

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

Doc ID: 1012073

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