KBRA assigns a long-term rating of AA to the State of Alaska General Obligation Refunding Bonds, Series 2024B and General Obligation Refunding Bonds, Series 2025A (Forward Delivery). KBRA additionally affirms the AA long-term rating on the State's parity General Obligation Bonds, and the AA- long-term rating on the Alaska Municipal Bond Bank Authority's G.O. Bonds outstanding.

The Stable Outlook reflects the expectation that Alaska will continue to meet ongoing budgetary requirements with measured recurring utilization of APF-ERA transfers resulting in the continuing maintenance of very strong reserves. The outlook is further supported by continued exploration and development of the State’s vast energy resources, particularly in the Alaska North Slope and Cook Inlet basins, and KBRA’s expectation that planned resource extraction projects will continue to support the State’s long-term comprehensive Fiscal Plan. In KBRA’s view, the State's prudent financial management will remain critical to countering its inherent vulnerability to both environmental risks and volatility in the energy sector.

Key Credit Considerations

The rating actions reflect the following key credit considerations:

Credit Positives

• Ample reserves and direct liquidity available to support budgetary operations; and,
• Robust natural resource base, which will likely continue to serve as a key economic driver.

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 rating 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) is a full-service credit rating agency 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 by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

Doc ID: 1005256

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