HomeMy WebLinkAbout26-0116 - 2026-09-29 - Informal ReportFORT WORTH.;
INFORMAL REPORT TO CITY COUNCIL MEMBERS
SUBJECT: 2026 DEBT PLAN - BOND SALE RESULTS - ALEX LAUFER, FINANCIAL
MANAGEMENT SERVICES ASSISTANT DIRECTOR AND BRIT STOCK, DEBT MANAGER
DATE: 09/29/26 NUMBER: IR 26-0116
TO THE MAYOR AND MEMBERS OF THE CITY COUNCIL
This Informal Report provides the Mayor and City Council with a summary of the final pricing
results and credit rating outcomes for the bond issuances included in the City's 2026 Debt Plan,
including General Purpose Bonds, Series 2026 and Combination Tax and Revenue Certificates
of Obligation, Series 2026, collectively referred to as the General Obligation Debt or "GO Debt";
Water and Sewer System Revenue Bonds, Series 2026B ("W&S Revenue Bonds"); and Special
Tax Revenue Bonds (Convention Center Venue Project), Series 2026 ("CCVP Bonds").
Overview of Credit Rating Outcomes
On April 13, 2026, City Staff and the City's financial advisors met with S&P Global (S&P) in
accordance with the annual credit surveillance of the Water and Sewer System. Additionally,
on July 24, 2026, City Staff and the City's financial advisors met with credit rating agencies
Moody's Investors Service, Inc. (Moody's) and Fitch Ratings Inc. (Fitch) to obtain credit ratings
on the City's planned bond issuances.
We are pleased to report that the City's Water and Sewer System received an upgrade to AAA
from S&P, while the GO Debt received an upgrade from Fitch to AA+ and Moody's revised its
outlook on the GO Debt rating to Positive from Stable. Further, the City's existing Special Tax
Bonds for the Multipurpose Arena Venue Project received an upgrade from Fitch, while the
Convention Center Venue Project's ratings were affirmed by both Fitch and Moody's.
The City's current bond credit ratings for each credit are outlined below:
Special Tax
Rating Agency
GO Debt
W&S Revenue Bonds
CCVP MAVP
Moody's
Aa3/Positive
Aa1/Stable
A2/Positive Aa3/Positive
S&P
AA/Stable
AAA/Stable
NR NR
Fitch
AA+/Stable
AA/Stable
AA -/Stable AA/Stable
Kroll
AA+/Stable
NR
NR NR
GO Debt Ratina Overview
Consensus credit strengths of the City's property tax -secured GO Debt include a large,
diverse and growing economic base, strong financial reserves and liquidity, and strong
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financial management and long-term financial planning. The City's pension funding position
has also improved materially, with increased contributions and a declining unfunded liability
reducing long-term liability pressures.
Credit challenges for the GO Debt rating continue to include the City's elevated long-term
liability and fixed -cost burden relative to peers, driven primarily by pension and other long-
term obligations, as well as the substantial debt issuance associated with the City's capital
improvement program. The City also operates within state -imposed property tax limitations
that constrain revenue -raising flexibility, while historically high property value protests and the
Tarrant Appraisal District (TAD) reappraisal schedule have recently affected property tax
collections.
Water & Sewer System Ratina Overview
Credit strengths of the City's Water & Sewer System Revenue Bonds include strong
management, favorable operating performance, strong liquidity, and the ability to adjust
rates to support debt service and capital investment. Moody's expects timely rate increases
to maintain healthy debt service coverage and liquidity as the utility implements its sizable
capital program.
The primary credit challenge for the W&S Revenue Bonds is the substantial capital investment
required to accommodate continued system growth, which will result in increased debt and
lower debt service coverage. The current CIP includes approximately $1.5 billion of investment
from fiscal 2027 through 2030, approximately two-thirds of which is expected to be debt -
funded.
Special Tax Ratina Overview
Credit strengths of the CCVP Bonds include a growing pledged revenue stream, dedicated
Hotel Occupancy Tax revenues, and substantial accumulated reserves. Revenue supporting
the City's venue -related debt has experienced strong growth, driven in part by the additional
2% Hotel Occupancy Tax approved in 2024.
The primary credit challenge for the CCVP Bonds is the increased leverage associated with
the Convention Center expansion and the resulting increase in debt supported by the
pledged revenues.
The rating reports and ratings presentation are accessible online at:
httr)s://www.fortworthtexasbonds.com
Overview of Final Pricina Results
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With the assistance of the City's financial advisors, the City received bids for the GO Debt and
Water & Sewer Revenue Bonds on August 27, 2026. Additionally, the City priced the CCVP Bonds
on September 9, 2026. The following results reflect competitive sales for the GO Debt and W&S
Revenue Bonds and a negotiated sale of the CCVP Bonds. The number of bids received for the
competitively sold bonds and the resulting True Interest Costs (TIC) demonstrate strong
investor demand and competitive borrowing costs.
Number
Sale
True Interest
of Bids
Winning Bidder
Bond Issue
Date
Amount Sold
Cost (TIC).
Received
/ Underwriter
W&S Revenue Bonds
8/27
$230,740,000
4.613%
8
BofA Securities
General Purpose Bonds
8/27
$101,010,000
4.067%
13
JP Morgan
Certificates of Obligation
8/27
$97,890,000
4.261%
12
JP Morgan
Special Tax CCVP Bonds
9/9
$497,120,000
5.088%
N/A
JP Morgan*
*Managing Underwriter selected through Request For Qualifications submissions
Next Steps
At the time of this writing, the General Obligation Debt and W&S Revenue Bonds are
scheduled to close and fund on September 24, 2026. The Special Tax CCVP Bonds are
scheduled to close and fund on October 1, 2026.
We are pleased to share excellent rating outcomes and pricing results. Special thanks to FMS
and the City attorney staff, the City's financial advisors, and bond counsel for their hard work
and dedication to the credit rating and bond issuance process. If you have any questions,
please contact Alex Laufer, Assistant Finance Director, at 817-392-2268 or Brit Stock, Debt
Manager at 817-392-8980.
Jesus "Jay" Chapa
City Manager
ISSUED BY THE CITY MANAGER
FORT WORTH, TEXAS
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