KBRA Assigns AA Rating, Stable Outlook to the City of Jacksonville, FL Special Revenue Bonds, Series 2025
18 Jul 2025 | New York
KBRA assigns a long-term rating of AA to the City of Jacksonville, FL Special Revenue Bonds, Series 2025. Concurrently, the long-term rating of AA on the City's outstanding Special Revenue Bonds is affirmed.
The long-term rating of AA is also affirmed on the City's Special Revenue (BJP) Bonds, which are payable from Covenant Revenues and further payable from Infrastructure Sales Tax revenues available after satisfaction of the debt service and reserve account funding requirements of the City's Better Jacksonville Bonds.
The Outlook on all bonds is Stable.
Key Credit Considerations
The ratings reflect the following credit considerations:
Credit Positives
- Covenant Revenues, in aggregate, have demonstrated stability over economic cycles, thus allowing for maintenance of anti-dilution test coverage of more than 4.3x MADS in each of the last five fiscal years.
- Debt ratios are very manageable, both on a per capita basis and as a percentage of the full market value of real property.
Credit Challenges
- Although the City is addressing high fixed costs through previously enacted pension reform measures and careful adherence to its own debt affordability metrics, required pension contributions will likely exert continued budgetary pressure.
- Additional Special Revenue Bonds are planned to finance the debt funded component of planned general capital improvements totaling approximately $1.2 billion through FY 2029.
- Essential governmental services are statutorily prioritized over debt service on the Special Revenue Bonds.
Rating Sensitivities
For Upgrade
- Reduced pension funding requirements, sustained decline in pension costs and improved operating flexibility, as anticipated beginning in 2031 with the flow of Pension Liability Surtax revenues into the pension system.
- An improvement in wealth indicators, which trail State and national averages.
For Downgrade
- An increase in operating expenditures, decline in General Revenues, or increase in Special Revenue Bond debt service that causes the ratio of Covenant Revenues to Special Revenue Bond debt service to approach the 2.0x MADS anti-dilution test threshold.
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