Public Finance: U.S. State General Obligation Rating Methodology

Executive Summary

This document describes Kroll Bond Rating Agency, LLC and its rating affiliates’ (collectively, “KBRA”) general rating methodology as it pertains to general obligation bonds issued by U.S. States. It identifies the determinants used in the assignment of a credit rating and intends to provide guidance and insight to all market participants as to how these determinants are evaluated in the process of assigning a rating.

KBRA has identified four Rating Determinants that are used in assigning credit ratings for general obligation bonds of U.S. States, as follows:

KBRA assesses both qualitative and quantitative factors when assigning a rating. KBRA evaluates a range of factors that determine the credit strength of a particular state and may compare these factors across other…