Rating Action: Moody's upgrades to Aa1 on Wylie, TX's issuer and GOLT ratingsGlobal Credit Research - 09 Feb 2022Assigns Aa1 to Series 2022 GOLTsNew York, February 09, 2022 -- Moody's Investors Service has upgraded to Aa1 from Aa2 on the City of Wylie, TX's issuer and general obligation limited tax ratings. Moody's has assigned a Aa1 to the city's $12.1 million General Obligation Refunding and Improvement Bonds, Series 2022. Including the current issue, the city has roughly $72 million of total debt outstanding.The city's Aa1 issuer rating represents Moody's assessment of debt supported by a general obligation unlimited tax (GOULT) pledge. The city does not have any debt supported by a GOULT pledge. The Series 2022 bonds are payable from a limited property tax based on tax rate limitations under Texas statute.RATINGS RATIONALEThe upgrade of the issuer rating to Aa1 reflects the city's significantly improved financial position and strong reserves compared to the median of similarly rated peers. The Aa1 also reflects the city's rapidly expanding tax base northeast of the Dallas (A1 stable) metropolitan area and above average resident incomes. Additional commercial and residential growth is expected to come online over the next few years, providing new opportunities for revenue growth. The city's debt, pension liabilities, and fixed costs are expected to remain manageable and in line with peer medians given prudent planning practices.The upgrade to the Aa1 rating on the city's general obligation limited tax (GOLT) debt is the same as the Moody's issuer rating, reflecting the city's adequate taxing headroom, which offsets the lack of full faith and credit pledge and inability of the city council to override the statutory limitation. The current tax rate for the GOLT bonds is $1.52 per $1,000 of assessed value (AV) compared to a maximum total tax rate of $25.00 per $1,000 of AV, of which no more than $15.00 per $1,000 of AV can be allocated to debt per the Texas Attorney General. Comparing the allowable maximum levy to maximum annual debt service before adjustments for utility system support of GOLT debt the city maintains headroom of 603%.RATING OUTLOOKMoody's does not generally assign outlooks to local government credits with this amount of debt outstanding.FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS- Taxable valuation growth- Moderation of debt and/or pension liabilitiesFACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS- Trend of operating deficits that result in a material reduction of reserves- Increases to debt, pension liabilities, or fixed costsLEGAL SECURITYThe Series 2022 bonds constitute direct obligations of the city, payable from the proceeds of a continuing, direct, annual ad valorem tax levied, within the limits prescribed by law, on all taxable property within the city.USE OF PROCEEDSProceeds from the Series 2022 bonds will refund a portion of the city's outstanding debt for interest cost savings and fund capital improvements to the city's streets and roads.PROFILEWylie is located 25 miles northeast of Dallas (A1 stable) in Collin County (Aaa stable), in the northeastern portion of the DFW metroplex. The city encompasses 37 square miles with an estimated population of approximately 50,000 residents.METHODOLOGYThe principal methodology used in these ratings was US Local Government General Obligation Debt published in January 2021 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBM_1260094. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.REGULATORY DISCLOSURESFor further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.The ratings have been disclosed to the rated entity or its designated agent(s) and issued with no amendment resulting from that disclosure.These ratings are solicited. Please refer to Moody's Policy for Designating and Assigning Unsolicited Credit Ratings available on its website www.moodys.com.Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.Moody's general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at http://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1288235.The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody's affiliates outside the EU and is endorsed by Moody's Deutschland GmbH, An der Welle 5, Frankfurt am Main 60322, Germany, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody's office that issued the credit rating is available on www.moodys.com.The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody's affiliates outside the UK and is endorsed by Moody's Investors Service Limited, One Canada Square, Canary Wharf, London E14 5FA under the law applicable to credit rating agencies in the UK. Further information on the UK endorsement status and on the Moody's office that issued the credit rating is available on www.moodys.com.Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating. Nathan Phelps Lead Analyst REGIONAL_SOUTHWEST Moody's Investors Service, Inc. 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