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KBRA Assigns AAA Rating, Stable Outlook to Oregon State Lottery Revenue Bonds, 2025 Series A & B

20 Mar 2025   |   New York

Contacts

KBRA assigns a long-term rating of AAA to the State of Oregon Department of Administrative Services Oregon State Lottery Revenue Bonds, 2025 Series A (Tax-Exempt Projects & Refunding) and 2025 Series B (Federally Taxable Projects). The Outlook is Stable.

Concurrently, KBRA affirms the long-term rating of AAA and Stable Outlook on outstanding parity bonds.

Key Credit Considerations

The rating was assigned because of the following key credit considerations:

Credit Positives

  • The Lottery provides funding for programs including economic development, parks and national resources, veterans’ services and the State’s Education Stability Fund. KBRA expects that the State would likely honor its moral obligation to replenish draws on debt service reserves, given the Lottery’s essentiality to State operations.
  • Pledged Revenues have proven resilient, including in 2020, when pandemic-related closures of bars and taverns led to periods with virtually no video lottery sales.
  • Strong legal protections include a 4.0x ABT, debt service pre-funding mechanism, and availability of debt service reserves fully funded at aggregate MADs.

Credit Challenges

  • Lottery sales are discretionary and economically sensitive in nature.
  • Increasing competition for entertainment and gaming dollars, as well as changing generational preferences, may contribute to reduced Lottery revenues over the long term.
  • The Lottery’s ability to attract new players is subject to external factors including demographics and hard to predict shifts in consumer entertainment preferences.
  • The State has not approved expansion of the Lottery into mobile gaming, including betting on college sports, once considered a potential driver of future gaming revenue growth.

Rating Sensitivities

For Upgrade

  • Not Applicable

For Downgrade

  • Sustained decline in Lottery sales that results in significantly diminished coverage of Lottery Revenue Bond debt service from unobligated net lottery proceeds.

To access ratings and relevant documents, click here.

Methodologies

Disclosures

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

Doc ID: 1008730

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