SAN FRANCISCO - Moody's Investors Service upgraded the underlying rating of many Alaska Municipal Bond Bank bonds to A1 from A2 ahead of a $62 million issuance planned today.
The upgrade affects obligations issued under the bond bank's 2005 general obligation bond resolution, affecting about $214 million of debt, including today's sale, Moody's said.
Today's issue is being sold at competitive auction. Western Financial Group is the financial adviser.
Moody's said the upgrade and new rating primarily reflect Alaska's moral obligation to support the debt of the bond bank under the 2005 resolution, statutory provisions that allow the state to provide such support, and the improved diversity of the pool of bond bank participants.
The issue will finance projects in Dillingham, Kodiak, the Kodiak Island Borough, and Seward.
The bond bank went to the market five times during 2007, according to Thomson Financial, and anticipates such a pace will continue, said financial adviser Chip Pierce of Western Financial Group.
"They're one of the main means by which local governments in Alaska access the capital market," Pierce said.
While many previous bond bank issuers have carried insurance, Pierce said that appears less likely now because of the problems dogging the insurance industry, though the bank sought pre-qualification from insurers before the competitive sale.
"It's bidder option," Pierce said. "We'll let the bidder determine where the value lies."
Standard & Poor's has affirmed its underlying A rating on the debt.
Moody's had already assigned an A1 rating to bond bank GOs that were issued under an earlier bond resolution, Pierce said.