S&P Global Ratings revised the outlook to negative from stable and affirmed its'A'underlying rating on Frost Independent School District (ISD), Texas’ general obligation (GO) debt outstanding. The outlook revision reflects the district’s trend of operating deficits, which has reduced reserves below peer medians. While the trend of reserve drawdowns is expected to abate in 2026, we could lower the rating if the district’s financial performance fails to stabilize over the near term. An unlimited ad valorem tax levied on all taxable property within the district secures the GO bonds outstanding. The rating reflects our view of the district’s lower, albeit still healthy, reserve balances following a trend of operating deficits, with a larger-than-budgeted deficit in fiscal 2025. Sources
