Press Release|Public Finance
KBRA Assigns AA- to Alaska Municipal Bond Bank General Obligation Bonds, 2023 Series Three (AMT); Affirms Related Ratings; Outlook is Stable
15 Nov 2023 | New York
KBRA assigns a long-term rating of AA- with a Stable Outlook to the Alaska Municipal Bond Bank General Obligation Bonds, 2023 Series Three (AMT).
KBRA additionally affirms the long-term rating of AA with a Stable Outlook for State of Alaska GO Bonds as well as the long-term rating of AA- with a Stable Outlook for Alaska Municipal Bond Bank General Obligation Bonds.
Key Credit Considerations
The rating actions reflect the following key credit considerations:
Credit Positives
- The essentiality of the Bank towards funding local government capital needs within the State;
- Extensive operating history, coupled with a solid history of debt repayment without realizing instances of loan payment default;
- Ample DSRF reserve balances, albeit partially satisfied with surety policies; and,
- Precautionary appropriation by the State each year since 2009 to make any AMBBA Capital Reserve Replenishments that may arise makes the State’s moral obligation more akin to that of an annual appropriation pledge.
Credit Challenges
- Sensitivity of loan repayments to the credit quality of underlying loan borrowers, which currently consist of approximately 37 local government entities.
Rating Sensitivities
For Upgrade
- An upgrade of the state’s bond rating.
For Downgrade
- A downgrade of the state’s bond rating.
- Failure of the Legislature to proactively grant AMBBA its annual standing appropriation for reserve replenishment.
To access rating and relevant documents, click here.