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GISD BOND RATING UPGRADED BY MOODY’S

October 16, 2018 

Moody’s Investors Service has upgraded Granbury ISD’s bond rating in an announcement issued on October 15, 2018. 

The upgrade to Aa2 from Aa3 reflects “multiple years of surplus operations and maintenance of healthy reserves levels, which we expect to continue despite the challenges of annual wealth recapture payments due to high property values per student,” according to the company’s news release.  Also included in the higher rating is “the district’s large and growing tax base with average income indices, manageable debt burden, and growing but manageable pension liability.” 

GISD previously was assigned the Aa3 rating in January 2014, when bonds were sold following ratification by local voters in November 2013.  The sale led to substantial savings for district taxpayers and a lower tax increase than expected. 

The bonds were sold with an interest rate of 4.08% and a final maturity date of 2039.  In preparation for the bond initiative in 2013, the BOSC advisors had projected a 5.25% interest rate that would result in a 15-cent tax increase per $100 of property valuation.  

With the lower rate, the taxes were expected only to increase by 13.4 cents, and district taxpayers were expected to save over $24 million in finance charges over the life of the bonds.  “The actions of the district’s administration and Board of Trustees have significantly reduced the district’s anticipated bond payments for current and future taxpayers within Granbury Independent School District,” wrote BOSC, Inc. managing director William J. Gumbert and investment banker Joshua M. McLaughlin in a letter to the district. 

However, the district eventually increased the interest and sinking (debt) tax rate only by 12 cents for the 2014-15 fiscal year – much less than the planned 15 cents before the election and the expected 13.4 cents at the time of the sale. 

Since then, because of the favorable sale in 2014 and tax base, school board trustees have been able to lower the tax rate by 7 cents, meaning that the 2013 bond only impacts the current tax rate by 5 cents. 

Moody's Investors Service is a leading provider of credit ratings, research, and risk analysis. Moody's commitment and expertise contributes to transparent and integrated financial markets. The firm's ratings and analysis track debt covering more than 135 sovereign nations, approximately 5,000 non-financial corporate issuers, 4,000 financial institutions issuers, 18,000 public finance issuers, 11,000 structured finance transactions, and 1,000 infrastructure and project finance issuers.