Moody’s Ratings assigns a Baa2 issuer rating to Traditions Metropolitan District, CO, downgrades Goult to Baa2 from A3

Moody’s Ratings assigns a Baa2 issuer rating to Traditions Metropolitan District, CO, downgrades Goult to Baa2 from A3

Moody’s Assigns Baa2 Rating to Traditions Metropolitan District, Downgrades Goult to Baa2

Moody’s Investors Service has assigned a Baa2 issuer rating to Traditions Metropolitan District in Colorado, reflecting the district’s moderate credit profile amid evolving fiscal challenges. Concurrently, the agency downgraded Goult Metropolitan District’s rating to Baa2 from A3, citing constrained revenue growth and heightened sensitivity to property tax limitations according to Moody’s analysis.

The ratings highlight broader pressures facing Colorado’s metropolitan districts, which rely on property tax revenues to service debt tied to infrastructure financing. While prior property reassessments in 2022 bolstered taxing headroom—the ratio of allowable incremental revenue to annual debt service—sustained growth is now limited by flat or declining property values and legislative efforts to cap tax increases as Moody’s notes. Moody’s observed that districts with headroom exceeding 50% typically maintain stronger credit profiles, but ongoing fiscal headwinds could erode this buffer.

Legislative actions, including House Bill 1001, which caps property tax revenue growth through 2025, further complicate revenue stability for metro districts according to Moody’s report. While districts may adjust mill levies in response to valuation changes, these adjustments are constrained by state-level tax relief measures. Moody’s emphasized that management’s ability to optimize financial strategies will be critical in maintaining credit quality amid these challenges according to Moody’s analysis.

Traditions Metropolitan District’s Baa2 rating indicates a moderate risk profile, with adequate liquidity but exposure to sector-wide vulnerabilities. Goult’s downgrade reflects a similar risk assessment, with reduced flexibility to navigate fiscal pressures compared to higher-rated peers. Both districts operate within a landscape where credit stability hinges on balancing infrastructure obligations with declining revenue growth.

Investors are advised to monitor legislative developments and district-specific management practices, as these factors will increasingly influence credit outcomes for Colorado’s metropolitan districts as Moody’s analysis indicates.

(https://www.bondbuyer.com/news/challenges-loom-for-colorado-metropolitan-districts-moodys-says): Colorado metropolitan districts face challenges, Moody’s says, Bond Buyer, 2025.