Moody’s Investors Service last week affirmed its Aa2 on Nebraska’s outstanding certificates of participation, which are issued to finance a variety of leases and equipment purchases for state agencies.

An infrequent issuer, the state has only $23 million of outstanding COPs and does not issue general obligation debt. Moody’s does not maintain an issuer rating on Nebraska, and assigns an Aa2 to its COPs and senior tax-backed debt.

Moody’s noted that Nebraska has the lowest debt burden in the nation, and is further anchored by conservative fiscal practices, timely appropriations, and the short maturities of the COPs.

The state ended fiscal 2011 with a budgetary balance of $210 million, in addition to $313 million in a cash reserve fund, Moody’s said. Officials drew on the reserves in 2011 and 2010, and a $256 million withdrawal helped balance the current 2012-2013 biennial budget. But the recent withdrawal was mostly offset by an influx of unexpected revenue.

The state expects to face a future structural deficit after lawmakers last year approved diverting a piece of the state sales tax to fund highway capital projects. 

Standard & Poor’s upgraded the state to AAA last May.

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