KBRA assigns a long-term rating of AAA to the San Diego Unified School District (San Diego County, California): 2026 General Obligation Bonds (Dedicated Unlimited Ad Valorem Property Tax Bonds) (Election of 2008, Series Q-1) (Federally Taxable); 2026 General Obligation Bonds (Dedicated Unlimited Ad Valorem Property Tax Bonds) (Election of 2008, Series Q-2); 2026 General Obligation Bonds (Dedicated Unlimited Ad Valorem Property Tax Bonds) (Election of 2018, Series J-1) (Federally Taxable); 2026 General Obligation Bonds (Dedicated Unlimited Ad Valorem Property Tax Bonds) (Election of 2018, Series J-2); 2026 General Obligation Bonds (Dedicated Unlimited Ad Valorem Property Tax Bonds) (Election of 2022, Series D-1) (Federally Taxable); and, 2026 General Obligation Bonds (Dedicated Unlimited Ad Valorem Property Tax Bonds) (Election of 2022, Series D-2). KBRA additionally affirms the long-term rating of AAA for the District's outstanding General Obligation Bonds.

The rating Outlook is Stable.

Key Credit Considerations

The rating actions reflect the following key credit considerations:

Credit Positives

• Robust bondholder protections are afforded by the California Constitution and state law.
• Substantial, diverse and growing tax base provides highly reliable source of G.O. debt repayment.
• The statutory framework for fiscal monitoring and reporting outlined in A.B. 1200 is a key credit strength.

Credit Challenges

• Assessed value growth is tempered by Proposition 13 of 1978 which limits the appreciation of existing residential property to the lesser of 2% or inflation in the absence of significant improvement or transfer in ownership.

Rating Sensitivities

For Upgrade

• Not applicable at AAA rating level.

For Downgrade

• Significant tax base declines which would necessitate a substantial increase in the tax rate for debt service.
• While not anticipated, legislative or judicial outcomes that are not consistent with KBRA’s understanding of the protections afforded to G.O. bondholders by the security structure and by the statutory framework for school district bankruptcies in the State.

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Methodology

• Public Finance: U.S. Local Government General Obligation Rating Methodology

Disclosures

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

Doc ID: 1017193

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