Fitch Ratings said it has assigned a AAA rating to the state of Alaska's $151.18 million general obligation bonds, series 2016A.
The bonds are expected to sell competitively on or about March 9.
In addition, the series 2016A bonds and the ratings noted below have been placed on Rating Watch Negative. The Negative Watch is expected to be resolved following the state's enactment of abudget for fiscal 2017: approximately $753.8 million of outstanding GO bonds rated AAA; approximately $244 million of outstanding appropriation bonds and certificates of participation (COPs) including the Matanuska-Susitna Borough, Alaska Goose Creek Correctional Center Project lease revenue bonds, series 2008, and the Anchorage, Alaska, correctional facilities lease revenue refunding bonds series 2005 rated AA-plus; approximately $930 million of outstanding Alaska Municipal Bond Bank Authority (AMBBA) bonds (2005 resolution) rated AA-plus; approximately $4 million of outstanding AMBBA bonds (2010 resolution) rated AA.
The Rating Watch Negative reflects uncertainty in both the execution and impact of budget initiatives to mitigate reserve draws and reduce revenue uncertainty tied to the natural resources sector, Fitch said. Cornerstones of the governor's proposal include an ongoing and permanent use of investment earnings derived from the state's permanent fund (PF) and a redirection of natural resource market risk to the PF. The governor has also recommended various tax measures and expenditure reductions.
