Press Release|Public Finance
KBRA Assigns AA Rating, Stable Outlook to State of Alaska General Obligation Refunding Bonds, Series 2024A; Affirms Ratings for Related Bonds
29 Apr 2024 | New York
KBRA assigns a long-term rating of AA to the State of Alaska General Obligation Refunding Bonds, Series 2024A. KBRA additionally affirms the AA long-term rating on the State's parity General Obligation Bonds, and the AA- long-term rating on the Alaska Municipal Bond Bank Authority's G.O. Bonds outstanding. The Outlook for each obligation is Stable.
Key Credit Considerations
The rating actions reflect the following key credit considerations:
Credit Positives
- Ample reserves and direct liquidity available to support budgetary operations; and,
- Robust natural resource base, which will likely continue to serve as a key economic driver.
Credit Challenges
- Exposure to commodity pricing volatility, given the employment and economic output concentration in natural resource extraction and production; and,
- Fluctuating budgetary performance, buoyed by the reliance on accumulated reserves to balance fiscal operations.
Rating Sensitivities
For Upgrade
- Decreased reliance on APF-ERA earnings to balance budgetary operations.
- A meaningful diversification of revenue sources, alleviating the concentration in energy price sensitive natural resource-derived revenues.
- Increased diversification of the State economy over time could lead to upward rating migration.
For Downgrade
- A weakening of budgetary performance, reserves, or direct liquidity.
- A continuation of structural budgetary imbalance, leading to the depletion of available reserves to levels no longer commensurate with the assigned rating.
To access rating and relevant documents, click here.