KBRA Assigns K1+ Rating to Cobb County School District, GA's Short-Term Construction Notes, Series 2024; Affirms K1+ Rating for Series 2023 Construction Notes and AAA Rating for Implied GO Credit

KBRA assigns a short-term rating of K1+ to Cobb County School District, Georgia's Short-Term Construction Notes, Series 2024, due December 15, 2024. Proceeds will finance, on a temporary basis, the current costs of constructing, improving and equipping various school facilities approved by voters at referendum, and paying expenses related thereto.

Additionally, KBRA affirms the short-term rating of K1+ on the District's Short-Term Construction Notes, Series 2023 due December 15, 2023, and the long-term rating of AAA with a Stable Outlook for the District's Implied General Obligation Credit.

Key Credit Considerations

Credit Positives

• Consistently sound historic coverage of note debt service reflects a conservative approach to budgeting and cash flow management.
• Strong financial flexibility stems from ample General Fund reserves and the District’s ability to increase the General Fund millage rate, if necessary, to support operations and debt service.
• The low to moderate fixed cost burden reflect the District’s historical trend of full pension ADC funding and its large annual OPEB pay-go contribution, somewhat offset by the absence of long-term general obligation debt.
• The broad and rapidly growing resource base demonstrates very favorable trends in assessed valuation, per capita income and employment.

Credit Challenges

• Ed-SPLOST (Sales Tax) revenues are economically sensitive and subject to volatility.

Rating Sensitivities

For Upgrade

• Not applicable.

For Downgrade

• Unanticipated declines in Ed-SPLOST revenues or increases in Ed-SPLOST capital outlays during calendar year 2024, resulting in materially diminished anticipated cash flow coverage that necessitates use of ad valorem revenues to pay principal and interest on the Notes when due.

To access rating and relevant documents, click here.

Methodologies

Public Finance: U.S. State and Local Government Short Term Cash Flow Note Rating Methodology

Public Finance: U.S. Local Government General Obligation Rating Methodology

ESG Global Rating Methodology

Disclosures

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

Doc ID: 1002793

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