Fort Worth tax notes rated AA+ ahead of October sale

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Fort Worth tax notes rating

Highlights

Fitch Ratings assigned an 'AA+' rating to Fort Worth's $23,870,000 tax notes, series 2026, scheduled for competitive sale on Oct. 29.
Fitch affirmed the city's Issuer Default Rating and other associated bonds at 'AA+', citing a 'aaa' financial resilience assessment with general fund reserves at least 15% of spending.
The 'AA+' MAVP bond rating reflects strong recovery prospects and ample debt service coverage, while CCVP bonds stay at 'AA-', expected to reach 1.5x coverage from stressed revenues over the medium term.

Rating action and sale timeline

As reported by Fitch Ratings, Fort Worth's $23,870,000 tax notes, series 2026, carry an 'AA+' rating and are scheduled for a competitive sale on Oct. 29. Fitch also affirmed the city's Issuer Default Rating, Fitch-rated limited tax bonds and special tax revenue bonds tied to the multipurpose arena venue project at 'AA+', while special tax revenue bonds for the convention center venue project remain at 'AA-'.

The agency says the 'AA+' IDR and limited tax bond rating reflect a 'aaa' financial resilience assessment, supported by 'Midrange' budgetary flexibility and an assumption that available general fund reserves equal at least 15% of spending. Fitch also points to a 'Strongest' population trend, 'Midrange' demographic and economic level metrics, and a 'Weakest' long-term liability burden.

Tourism taxes support venue bond profile

The 'AA+' rating on the MAVP bonds reflects a Revenue Risk assessment of 'a', backed by a narrow revenue stream of tourism-related taxes, moderate expected sensitivity to cyclical stress, solid recovery prospects from a diverse resource base, and strong growth prospects. Fitch says the rating also incorporates a 'aaa' resilience assessment, reflecting ample coverage of maximum annual debt service under its stressed scenarios, though the rating remains capped at the city's IDR.

For the CCVP bonds, the 'AA-' rating also reflects a Revenue Risk assessment of 'a' with similar characteristics to the arena bonds. Fitch expects coverage from stressed revenues to improve to 1.5 times maximum annual debt service over the medium term, with annual growth of 5% over the next two years followed by flat growth meeting the threshold for a 'aa' resilience assessment.

Fitch says Fort Worth's overall financial resilience is driven by the combination of its 'Midrange' revenue control and expenditure control assessments. The agency adds that the city's tourism-related economy continues to show strong growth prospects, supporting its credit profile.

In our earlier coverage of sovereign resilience in a higher-rate environment, we noted that prolonged geopolitical tensions and elevated fiscal spending are increasing borrowing risks as funding costs stay high. The piece highlighted that persistent shocks can erode fiscal headroom and worsen refinancing pressure, with emerging and frontier markets facing greater vulnerability due to high debt-service burdens and narrower revenue bases.

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