Research Update: Austin, TX Series 2026A Senior Lien Special Tax Revenue Bonds Rated 'AA-'; Outlook Stable

S&P Global Ratings assigned its 'AA-' rating to the City of Austin , Texas' proposed $540.55 million series 2026A senior lien special tax revenue bonds (Convention Center Project). At the same time, we assigned our 'BBB+' rating to the city?s proposed $122.45 million series 2026B junior lien special tax revenue bonds (Convention Center Project). The outlook is stable. The senior lien bonds are special limited obligations of the city, secured by a first lien on the pledged revenues. The junior lien bonds are secured by a junior and subordinate lien on pledged revenues. The pledged revenues are defined as revenues received by the city from a 4.5% hotel occupancy tax (HOT) as well as an additional 2% HOT (expansion HOT)

...Austin Hotel Tax (4.5% HOT and 2% Expansion HOT) and PFZ Revenues Senior Lien, Texas--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 Strong Baseline coverage assessment ABT MADS coverage (x) 2.76 MADS year 2046 Annual debt service coverage (x) -- Pledged revenue 2-year CAGR (%) (0.48) Bond provisions ABT (x) 1.50 ABT type MADS ABT period Historical DSRF type MADS 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. 2-year CAGR--2 periods of compound annual growth rate change over 3 years. ABT--Additional bonds test. DSRF--Debt service reserve fund. PL--Priority lien. OC--Obligor creditworthiness....

Research Update