Moody’s Ratings has assigned an Aa1 rating to New Braunfels Utilities’ proposed $134 million Utility System Revenue Refunding Bonds, Series 2025, and reaffirmed the Aa1 rating on all existing senior lien revenue debt.
“The rating reflects continued confidence in NBU’s financial management as it plans significant infrastructure upgrades – both to replace aging systems and support growth across the service area,” NBU noted.
Moody’s Investor Service cited NBU’s healthy cash reserves, growing customer base and strong long-term planning as key strengths supporting the rating. The outlook remains stable. Cash on hand is a financial safety net. It allows NBU to navigate uncertainty, maintain stable customer rates and ensure uninterrupted service to the community.
“This rating reaffirms that we are managing our utility with discipline, foresight and responsibility,” said NBU Chief Executive Officer Ryan Kelso. “It also allows us to secure more favorable interest rates when financing major infrastructure projects—ultimately saving our customers money over the long term.”
Bond ratings are similar to credit scores for organizations. A high rating enables NBU to borrow at favorable rates, reducing the long-term cost of projects that improve electric, water and wastewater systems, the Texas public power utility noted.
In its report, Moody’s highlighted:
• A growing customer base due to regional economic expansion
• Strong liquidity, with 357 days of cash on hand. This protects against unexpected costs like weather events and supports better borrowing terms
• Debt service coverage of 3.3 times in fiscal year 2024, with a policy target of 2.4 times going forward
• Responsible financial planning to manage debt as capital needs grow
“Moody’s acknowledged that NBU’s total outstanding debt is expected to nearly double over the next five years. However, ongoing customer growth and planned rate adjustments are expected to support continued financial stability,” NBU said.
“Because of our strong bond rating, we can borrow money at lower interest rates – saving millions that would otherwise come out of our customers’ pockets,” said NBU Chief Financial Officer Dawn Schriewer. “This rating reflects our commitment to transparency, fiscal stewardship and ensuring our utility is prepared to meet the demands of today and tomorrow.”
