Research Update: Austin, TX Series 2026 Hotel Occupancy Tax Revenue Refunding Bonds Rated 'AA'; Outlook Stable

S&P Global Ratings assigned its 'AA' rating to the City of Austin , Texas' proposed $20.9 million series 2026 hotel occupancy tax (HOT) revenue refunding bonds (separate venue lien). The outlook is stable. The bonds are special limited obligations of the city, secured by and payable solely from the proceeds of HOT revenues derived from a 2% venue HOT levied across Austin pursuant to Chapter 334 of the Texas Local Government Code. We rate the bonds under our priority-lien tax revenue debt criteria , Oct. 22, 2018, which factor in both the strength and stability of the pledged revenues, as well as the city's general credit quality. The refunding bond proceeds will be combined with contributions from Austin?s venue tax

...Austin, Texas hotel tax (2% venue HOT)--key credit metrics Economic data Economy Very strong Pledged revenue taxing base Austin EBI level per capita % of U.S. (taxing base) 134 Population (taxing base) 1,023,472 Broad and diverse MSA Yes Financial data Revenue volatility Moderate Coverage and liquidity Very strong Baseline coverage assessment MADS Coverage MADS coverage (x) 2.70 MADS year 2027 Annual debt service coverage (x) -- Pledged revenue 2-year CAGR (%) (0.48) Bond provisions ABT (x) -- ABT type Closed ABT period -- DSRF type None Obligor relationship Obligor linkage Close PL rating limit (number of notches above OC) 1 Data points and ratios may reflect analytical adjustments. EBI--Effective buying income. MSA--Metropolitan statistical area. MADS-Maximum annual debt service. Two-year CAGR--Two periods of compound annual growth rate change over three years. ABT--Additional bonds test. DSRF--Debt service reserve fund. PL--Priority lien. OC--Obligor creditworthiness. Ratings List New...

Research Update