KBRA Upgrades State of Alaska GO Bonds to AA+; Assigns AA Rating to State of Alaska Lease Revenue Refunding Bonds Series 2025A and 2025B (Forward Delivery) (Goose Creek Correctional Center Project); Upgrades Alaska Municipal Bond Bank GO Bonds to AA

KBRA upgrades the long-term rating for the State of Alaska General Obligation Bonds to AA+, from AA.

KBRA simultaneously assigns a long-term rating of AA to the Matanuska-Susitna Borough State of Alaska Lease Revenue Refunding Bonds, Series 2025A and Series 2025B (Forward Delivery) (Goose Creek Correctional Center Project).

Finally, KBRA upgrades the long-term rating for the Alaska Municipal Bond Bank Authority General Obligation Bonds to AA, from AA-.

The rating outlook for each obligation is Stable.

Key Credit Considerations

The rating actions reflect the following key credit considerations:

Credit Positives

• Ample reserves and direct liquidity available to support budgetary operations;
• Robust natural resource base, which will likely continue to be developed and serve as a key economic driver;
• Critical role in U.S. strategic interests deriving from its vast mineral reserves and position relative to geopolitical competitors anchors significant defense-related economic activity and continuing federal support.

Credit Challenges

• Exposure to commodity pricing volatility, given the employment and economic output concentration in natural resource extraction and production; and,
• Fluctuating budgetary performance, buoyed by the reliance on accumulated reserves to balance fiscal operations.

Rating Sensitivities

For Upgrade

• Decreased reliance on APF-ERA earnings to balance budgetary operations.
• A meaningful diversification of revenue sources, alleviating the concentration in energy price sensitive natural resource-derived revenues.
• Increased diversification of the State economy over time could lead to upward rating migration.

For Downgrade

• A weakening of budgetary performance, reserves, or direct liquidity.
• A continuation of structural budgetary imbalance, leading to the depletion of available reserves to levels no longer commensurate with the assigned rating.

To access ratings and relevant documents, click here.

Methodologies

• Public Finance: U.S. State General Obligation Rating Methodology
• Public Finance: U.S. State Annual Appropriation Obligation Rating Methodology
• ESG Global Rating Methodology

Disclosures

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

Doc ID: 1008273

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