OREANDA-NEWS. S&P Global Ratings has raised its underlying rating on Grand Lakes Municipal Utilities District (MUD) No. 4, Texas' general obligation (GO) debt outstanding to 'A' from 'A-'. At the same time, S&P Global Ratings has assigned its 'A' long-term rating to the MUD's series 2016 unlimited-tax refunding bonds. The outlook is stable.

"The upgrade reflects the MUD's maintenance of what we consider very strong reserve levels, and its limited additional debt-supported capital needs due to its built-out status of development," said S&P Global Ratings credit analyst Alexander Rawlings.

An unlimited ad valorem tax on all taxable property in the district secures the bonds.

The 'A' rating reflects our assessment of the district's:Participation in a master-planned community with direct access to the deep and diverse economy of the Houston metropolitan statistical area (MSA), Very strong financial position, andLow direct and total property tax rates. The rating is constrained by the MUD's moderately high debt burden.

The stable outlook reflects our expectation that the district will maintain its very strong financial position and that its completed infrastructure development will limit any additional debt-supported capital needs, allowing continued moderation of its overall net debt burden. For this reason, we don't expect to change the rating within the two-year outlook horizon.

We could raise the rating if there were a material increase in the district's available fund balance or the district were to see significant tax base growth that resulted in a lower overall net debt burden.

We could lower the rating if there were a material increase in the MUD's debt levels and a significant reduction in AV.