Travis County’s AAA bond rating could be downgraded by Moody’s Investors Service if the federal government’s rating is lowered as well. Moody’s Investors Service sent a warning Thursday to 177 public finance issuers that each would be “placed under review for possible downgrade the AAA ratings.” Nine Texas governments were included:
- Alamo Community College District
- Tarrant County Hospital District
- Bexar County
- Dallas County
- Tarrant County
- Travis County
- City of Richardson
- City of San Antonio
- San Antonio River Authority
A downgraded rating could result in higher interest rates for Travis County. From the Moody’s press release, local governments are being reviewed because of their ties to the federal government and federal funding.
"The ratings of these local governments, particularly those with a high economic dependence on federal activity, would be vulnerable to a downgrade of the U.S. government" said Moody's Senior Vice President Matt Jones, a team leader covering local government ratings. In addition to the risk of federal job reductions, Moody's review following a U.S. government downgrade would focus on a local government's reliance on capital markets, its dependence on federal revenues, its sensitivity to macroeconomic cycles, and its available financial resources to offset these risks."
