Press Release|Public Finance

KBRA Assigns AAA, Stable Outlook to State of Wisconsin G.O. Bonds

10 Aug 2023   |   New York


KBRA assigns a AAA rating, with a Stable Outlook to the State of Wisconsin's (the State's) General Obligation (G.O.) Bonds of 2023, Series B. Concurrently, KBRA affirms the long-term AAA rating with a Stable Outlook on outstanding G.O. Bonds and G.O. Flexible Rate Notes (FRNs); the short-term K1+ rating on the G.O. Commercial Paper (CP) Program and G.O. Extendible Municipal Commercial Paper (EMCP) Program; and the long-term AA+ rating with a Stable Outlook on outstanding Master Lease Certificates of Participation (COPs). The COPs long-term rating is derived from the State's long-term G.O. rating and an evaluation of factors discussed in KBRA's U.S. State Annual Appropriation Rating Methodology. As of August 1, 2023, the State had $6.7 billion of general obligations outstanding, including fixed rate G.O. Bonds, variable rate G.O. FRNs and EMCP Notes, and Variable Rate Demand Obligation (VRDO) Notes.

Key Credit Considerations

The rating actions incorporate the following key credit considerations:

Credit Positives

  • Strength and breadth of the G.O. pledge, coupled with liquidity and market access to support short-term debt.
  • Trend of conservative budgets, strong financial results, and improved reserve levels.
  • Strong liquidity position based on all sources of available cash for operations.
  • Essentiality of leased assets under the Master Lease Program, supported by a strong, well established legal framework.

Credit Challenges

  • Any exogenous event that derails the pace of economic recovery.
  • Ability to maintain a positive, GAAP basis Total Fund Balance in successive fiscal years.

The Stable Outlook reflects KBRA’s expectation that the State’s fiscal discipline and economic resiliency will continue to support a strong recovery in the post-pandemic environment and sustain financial performance and reserve levels commensurate with the current G.O. rating level. Additionally, in KBRA’s view, there remains considerable incentive for the State to continue appropriating for assets under the Master Lease Program.

Rating Sensitivities

For Upgrade:

  • Not applicable.

For Downgrade:

  • While unlikely, limited and/or expensive market access to manage maturing CP and EMCP Notes.
  • Material financial weakening, driven by budgetary imbalance over an extended period.
  • A change in essentiality of assets leased under the Master Lease Program, increasing the risk of non-appropriation.

A report will follow shortly. To access ratings and relevant documents, click here.


805 Third Avenue
29th Floor
New York, NY 10022
+1 (212) 702-0707
Contact Us

© 2010-2023 Kroll Bond Rating Agency, LLC. All Rights Reserved. Kroll Bond Rating Agency, LLC is not affiliated with Kroll Inc., Kroll Associates Inc., KrollOnTrack Inc., or their affiliated businesses.