Three national bond rating services gave Alaska generally good marks for chipping away at its structural budget deficit.
One rating service continues to take a guarded view of the state's fiscal future but did not downgrade Alaska's bond rating.
But overall, they are the highest lease debt ratings the state has received, said Tom Boutin, deputy commissioner for the Department of Revenue.
The ratings were triggered by a proposed $14 million seafood and food safety lab to be built in Anchorage in September. It would replace an aging facility located in Palmer.
The facility would be paid for by a lease-purchase agreement through certificates of participation expected to be sold in August.
Moody's Investors Service, one of the state's two major bond rating agencies, assigned the certificates an Aa3 rating but continued to maintain its negative outlook for Alaska.
Moody's rating, which is lower than the state's general obligation bond rating because of the type of financing involved, is considered a high-grade rating, said Moody's Bob Kurtter.
Alaska's long-term outlook was downgraded by Moody's last August due to the state's chronic budget shortfall.
In a draft report issued this week, Moody's said the state must take "meaningful steps" toward achieving a long-term balanced budget, but noted "fiscally prudent actions" taken by Murkowski.
The rating agency said Alaska still has a sizable structural budget deficit and a continued reliance on its budget reserves.
"We are working very hard to change that outlook back to stable," Boutin said.
Standard & Poor's gave the state project a strong AA- rating and Fitch Ratings gave it an A+ rating. Alaska's general obligation bonds are rated AA by Fitch.
Standard & Poor's, which rates Alaska's future outlook as stable, noted the state has nearly $5 billion in the Constitutional Budget Reserve and the Alaska Permanent Fund reserves.
Alaska has strong financial management with prudent reserve policies, continuing North Slope oil production and a low debt burden, the rating service said.
In a press statement, Murkowski said the state's strong bond ratings are good news. "They confirm that we are on the right track," he said.
Bond ratings affect the interest rate paid on the debt and also can influence ratings of municipal governments in Alaska.
© 2017. All Rights Reserved. | Contact Us