Wisconsin Outlook Revised to Positive by Moody's

Moody's Investors Service said it has changed the outlook to positive for the state of Wisconsin, assigned the Aa2 rating to the current $296.9 million general obligation refunding bonds of 2014, Series 4 and affirmed the Aa2 rating on the state's $7.7 billion in outstanding general obligation bonds.

Moody's has also affirmed the Aa3 rating on the states appropriation bonds.

The bonds are expected to sell no earlier than November 25. Proceeds of the 2014 Series 4 bonds will be used to advance refund bonds at a future redemption date for debt service savings.

The positive outlook reflects an improved liquidity position, conservative management of retiree benefits that limits future budgetary pressures, and reductions in the state's long standing negative GAAP fund balance that, if continued, would allow the state to improve its reserves and balance sheet.

The states Aa2 general obligation rating incorporates as a fully funded pension system and limited OPEB liability, moderate economic growth, as well as governance constraints evidenced by limited executive authority to reduce mid-year appropriations.

The rating also acknowledges the current 2013-2015 biennium budget does not include any fund transfers or debt restructuring to balance the budget, actions the state relied heavily on in the past, as well as remaining risks evidenced by continued revenue volatility and a fund balance position that remains below average.

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