Moody's Investors Service said it has upgraded to Aa2 from Aa3 North Slope Borough, Alaska's outstanding general obligation unlimited tax bonds debt totaling $307.2 million.
At this time, Moody's assigned a Aa2 rating to the borough's general obligation bonds, Series 2014A in the estimated amount of $132.2 million.
The rating outlook on the borough is stable. The bonds are secured by the borough's unlimited property tax pledge, though functionally debt service is funded by a portion of the regular property tax levy of up to 20 mills on oil related property. Bond proceeds will finance various capital projects throughout the borough that include school and administration facilities, utility needs, and public works.
The upgrade to Aa2 primarily reflects the borough's very large tax base, a sound financial position demonstrated by ample reserves and very strong liquidity, and also a manageable debt burden. Rapid amortization mitigates potential risks for the local economy's outsized dependence on oil and gas activity. The rating also incorporates borough's rural service area and severe concentration of the largest property taxpayers.
