Press Release|Public Finance
KBRA Assigns AA Rating to State of Louisiana General Obligation Bonds, Series 2025-B; Affirms Rating for Parity Bonds
18 Mar 2025 | New York
KBRA assigns a long-term rating of AA to the State of Louisiana General Obligation Bonds, Series 2025-B and affirms the long-term rating of AA for the State's outstanding General Obligation Bonds. The rating Outlook is Stable.
Key Credit Considerations
The rating actions reflect the following key credit considerations:
Credit Positives
- Conservative budget practices and pandemic-related federal assistance have resulted in historically large reserves and liquidity as of FYE 2024.
- Low tax supported debt ratios and affordable pension commitments contribute to low fixed cost burden.
- Efforts to restructure major taxes may yield increased economic competitiveness and growth over time.
Credit Challenges
- Weak socioeconomic metrics relative to other U.S. States.
- Moderate exposure to energy price volatility reflecting its sizable oil and gas industry.
- Vulnerability of economic base to hurricane events and coastal erosion.
Rating Sensitivities
For Upgrade
- Sustained improvement in economic indicators including per capita income, employment, educational attainment and population growth.
For Downgrade
- A significant reduction in budgetary reserves and liquidity.
- Further weakening of existing trends in economic indicators.
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