KBRA Assigns the University of North Texas System RFS Bonds AA Rating, Stable Outlook

KBRA assigns a AA, Stable Outlook to University of North Texas System Board of Regents Revenue Financing System ("RFS") Refunding and Improvement Bonds Series 2025A and RFS Taxable Refunding and Improvement Bonds Series 2025B. Concurrently, KBRA assigns a AA, Stable Outlook to outstanding parity RFS Bonds previously issue by the Board on the System's behalf. RFS Obligations issued under the Master Resolution, including the Series 2025A and Taxable Series 2025B Bonds, are payable from and solely secured by Pledged Revenues of the RFS System. Pledged Revenues consist of Revenue Funds, including all unencumbered funds and balances legally available to the Board.

Key Credit Considerations

The rating was assigned because of the following key credit considerations:

Credit Positives

• Solid finances, with sufficient liquidity, diverse funding sources and balanced financial operations.
• Healthy student demand, with a growing out-of-state component.

Credit Challenges

• On-going plans for debt issuance driven by required capital needs that could leverage the balance sheet.

Rating Sensitivities

For Upgrade

• Strengthened financial performance and liquidity, providing enhanced financial flexibility.

For Downgrade

• While not expected, a significant increase in leverage which weakens the RFS security pledge and structure.
• Continued freeze of undergraduate tuition, coupled with a significant decline in State funding that strains operations.

To access ratings and relevant documents, click here.

Methodologies

• Public Finance: Private, Not-For-Profit U.S. Higher Education 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), one of the major credit rating agencies (CRA), is a full-service CRA 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 (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

Doc ID: 1009121

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