LOS ANGELES - The Alaska Municipal Bond Bank Authority is planning to sell $62 million of general obligation bonds next week to fund loans to local governments within the state.
The deal will include $48.3 million of tax-exempt bonds and $14.1 million of taxable bonds.
The bank is a public corporation that helps Alaska's municipalities in financing capital improvement projects such as schools, water and sewer systems, public buildings, harbors, and docks.
"The bond bank's programs have a solid history of debt repayment, and the state of Alaska has a demonstrated history of support for and involvement with the bond bank," analysts at Fitch Ratings said in assigning a AA-plus rating and stable outlook. "The bond bank has consistently worked with the state to strengthen bondholder protections while achieving its programmatic goals."
Fitch also noted the state's annual appropriation of debt service and the multiple layers of security supporting the bank's bonds.
Security enhancements include issuer reserve funds, bond bank reserve funds, the state's appropriation and its moral obligation, and the bank's authority to intercept aid to local governments.
Moody's Investors Service assigned the bonds a Aa2 rating and stable outlook, based on the state's moral obligation to support the bond bank's debt.
About half of the proceeds from next week's deal will be loaned to Kenai Peninsula Borough for construction of a specialty clinical services medical facility for the Central Peninsula Hospital. The next largest loan—around $25 million—will go to Kodiak Island Borough for high school building improvements.
The remaining proceeds will be lent to Juneau and King Cove. Juneau will use $6 million to build offshore floating docks for cruise ships. King Cove will get around $1.5 million primarily for a hydroelectric project that will reduce the city's reliance on diesel-powered generators.
