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Fitch Ratings assigns 'AAA' rating to North East Independent School District bonds.

Austin: Fitch Ratings, a nationally recognized statistical rating organization (NRSRO) designated by the U.S. Securities and Exchange Commission, assigned a 'AAA' rating based on the Texas Permanent School Fund (PSF) guaranty and a 'AA+' underlying rating to the following North East Independent School District, Texas unlimited tax bonds (the bonds or ULTs): --$148.06 million unlimited tax (ULT) refunding bonds, series 2018.

The bonds are scheduled to sell via negotiation during the week of July 9. Proceeds from the sale of each series of bonds will be utilized to refund outstanding commercial paper notes and pay the costs of issuance. The bonds are payable from an unlimited ad valorem tax pledge levied against all taxable property within the district. The bonds are also backed as to principal and interest repayment from a guaranty provided by the PSF.

The 'AA+' IDR and ULT ratings are underpinned by the district's superior operating performance, solid expenditure flexibility and moderate long-term liability burden. North East ISD is one of the largest school districts in Texas with current enrollment in excess of 66,000 students. For the past few years, the district has experienced consecutive enrollment declines, which management attributes to the sizable presence of charter schools in the San Antonio metro area. Fiscal 2018, average daily attendance, a key driver of state funding, totaled 61,641 (a 3.5% decline from fiscal 2015). Management is anticipating another enrollment loss of about 1,300 students in fiscal 2019. Despite this trend, district officials expect enrollment losses to gradually taper given capacity limitations of competing charters schools. The district serves a 2016 urban-suburban population of approximately 445,000 in north and northeast Bexar County, including portions of San Antonio. Fitch rates both Bexar County and San Antonio GO bonds 'AAA'/Stable Outlook.

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Publication:Daily the Pak Banker (Lahore, Pakistan)
Geographic Code:1U7TX
Date:Oct 3, 2018
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