Moody's Assigns Baa2 Rating to Montgomery County MUD 128A, TX's Proposed $6.2 Million Unlimited Tax Road Bonds, Series 2025

Strategic Insights -

Moody's Investors Service has assigned a Baa2 rating to Montgomery County Municipal Utility District 128A, TX's proposed $6.2 million Unlimited Tax Road Bonds, Series 2025. The district's outstanding general obligation unlimited tax (GOULT) debt will total $76.4 million after the sale. The Baa2 rating reflects the district's moderately-sized and rapidly growing tax base, valued at $582.3 million in fiscal 2026, which has expanded by an average annual growth rate of 56.4% over the past five years. The district's financial operations are sound, with improved reserves and a 118.5% available fund balance in fiscal 2024.

Key Takeaways:

  • The Baa2 rating reflects the district's moderately-sized and rapidly growing tax base, valued at $582.3 million in fiscal 2026, which has expanded by an average annual growth rate of 56.4% over the past five years.
  • The district's financial operations are sound, with improved reserves and a 118.5% available fund balance in fiscal 2024.
  • The district will have $76.4 million of GOULT debt outstanding after the sale.
  • The district benefits from the lack of pension or other post-employment benefit (OPEB) liabilities.
  • The district has a high 14.1% debt burden and slow principal amortization relative to sector peers.
  • The district owes roughly $41 million in developer reimbursements, indicating a need for additional borrowing in the future.
  • Montgomery County MUD 128A is being developed as the master-planned residential community known as The Woodlands Hills, with homes ranging from $312,000 to $715,000.
  • The district encompasses approximately 959.67 total acres and is located within Montgomery County, TX, and the City of Conroe, TX.

Statistics:

  • Tax base growth rate: 56.4% over the past five years.
  • Current tax base value: $582.3 million (fiscal 2026).
  • Available fund balance: 118.5% of revenue (fiscal 2024).
  • GOULT debt outstanding: $76.4 million after the sale.
  • Developer reimbursement: $41 million.
  • Principal debt burden: 14.1% relative to sector peers.

Sources:

  • Moody's Investors Service, "Ratings: Montgomery County Municipal Utility District 128A, TX".
  • Moody's Investors Service, "Rating Methodologies: US Special Purpose District General Obligation Debt", published in February 2025.