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Moody's Investors Service Inc.

Moody's Affirms Fort Worth, TX's Strong Credit Rating Amid Ongoing Economic Growth

Strategic Insights

— 2 min read

Moody's Investors Service has reaffirmed the City of Fort Worth, TX's Aa3 issuer and general obligation limited tax (GOLT) ratings, citing the city's diverse and growing economic base, strong financial profile, and a long-term trend of outperforming conservative budgeting expectations. The rating agency also upgraded the city's special tax bonds issued for the Multipurpose Arena Venue Project (MAVP) to Aa3 from A1.

Key Takeaways:

  • The city's diverse and growing economic base, with a high demand for residential housing and defense spending, maintains stable economic metrics.
  • The city's strong financial profile is supported by a long-term trend of outperforming conservative budgeting expectations, available fund balance, and liquidity ratios above 50% of revenue in fiscal 2025.
  • The city's elevated long-term liabilities and fixed costs ratios remain a constraint, with estimated ratios of around 300% and 20%, respectively, and are elevated relative to Aa peers.
  • The rating agency has assigned a stable outlook to the issuer, GOLT, lease appropriation, special tax, and water and sewer utility revenue ratings, reflecting the likelihood of continued economic growth and rate increases driving operating revenue growth and maintaining the city's strong operating reserves.
  • The A2 rating on the city's special tax bonds for the Convention Center Venue Project (CCVP) reflects initial MADS coverage that will be strong, but will decline to well below 2x MADS following the material 2026 issuance to fund the remainder of costs to expand the city's convention center.
  • The Aa1 rating on revenue bonds of the water and sewer utility system reflects strong credit fundamentals, including a large, diverse, and growing customer base, and robust management practices, including conservative, multi-year financial and capital planning with regular rate increases.
  • The Aa1 rating on revenue bonds of the drainage utility system reflects strong credit fundamentals, including a large, diverse, and growing customer base, and strong debt service coverage on both a gross and net revenue basis.

Statistics:

  • Estimated long-term liabilities and fixed costs ratios: 300% and 20% (issuer and GOLT)
  • Fiscal 2025 available fund balance and liquidity ratios: above 50% of revenue
  • City's debt in the fiscal 2026-29 capital improvement plan (CIP): $1.9 billion
  • Water and sewer utility CIP: more than $2.1 billion of investment through fiscal 2030
  • Drainage utility CIP: more than $178 million of investment, with about 35% debt funded

Sources:

  • Moody's Ratings: Moody's Investors Service
  • US Cities and Counties: published in July 2024, available at https://ratings.moodys.com/rmc-documents/425429
  • US Municipal Utility Revenue Debt: published in March 2024, available at https://ratings.moodys.com/rmc-documents/416489

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