Fitch Ratings, one of the world’s leading credit rating agencies, revised TSC’s rating outlook to positive from stable after affirming the college’s ‘AA-‘ rating on TSC District’s Issuer Default Rating (IDR), and approximately $52.7 million in outstanding limited tax bonds and maintenance tax notes.
“Texas Southmost College is pleased that Fitch Ratings continues to recognize the commitment and effort of the TSC Board of Trustees and our faculty and staff for being good stewards of the college’s financial resources,” TSC Interim President Mike Shannon said. “We have a great responsibility to the taxpayers in our college district, and we’re proud to report that the college continues to move in a positive direction.”
According to the report, the ratings given to TSC reflect Fitch Ratings’ view of the district’s “sound fiscal performance and maintenance of a high level of financial flexibility while operating independently in recent years.”
Fitch believes that TSC is less vulnerable to economic downturn, given its conservative budgeting practices and high levels of liquidity. The outlook incorporates Fitch’s expectation that the college will continue to maintain prudent budget practices resulting in positive operating margins and debt service coverage, and will continue to grow without additional debt issuance.
The report added that “the affirmation of the IDR and limited tax bond ratings at ‘AA-‘ is underpinned by the district’s ample revenue-raising ability, sound expenditure flexibility, and a low long-term liability burden.”
In December 2016, Standard & Poor’s Global Ratings raised the long-term rating and underlying rating on the TSC District’s revenue bonds to ‘A+’ from ‘A’.
The enhanced rating reflected S&P’s opinion that TSC has strong financial resources, a history of modest surpluses on a full-accrual basis, diverse revenue streams, a history of solid tax base growth and an experienced management team.
About Texas Southmost College
Originally established in 1926, Texas Southmost College currently offers the first two years toward a bachelor’s degree, along with career and technical education leading to certificates and associate degrees, college preparatory studies to prepare students for college-level work, workforce training, and continuing education. Recently selected as a Bright Spot by the White House Initiative on Educational Excellence for Hispanics, TSC offers over 50 programs of study leading to an associate degree or certificate.