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KBRA Upgrades State of Wisconsin's Outstanding GO Bonds and Master Lease COPs and Assigns AA+/Stable to the State's GO Refunding Bonds of 2017, Series 2
[October 19, 2017]

KBRA Upgrades State of Wisconsin's Outstanding GO Bonds and Master Lease COPs and Assigns AA+/Stable to the State's GO Refunding Bonds of 2017, Series 2

Kroll Bond Rating Agency (KBRA) has assigned a AA+ long-term rating and Stable Outlook to the State of Wisconsin's General Obligation Refunding Bonds of 2017, Series 2 (the "Bonds"). Concurrently, KBRA has taken the following rating actions to the State's various debt obligations.




    Series/Bond     Rating     Outlook     Action
State of Wisconsin     General Obligation Refunding Bonds of 2017,

Series 2 ("the 2017 Series 2 Bonds")

·$273 million

    AA+     Stable     Assigned
      General Obligation Bonds

·$5.3 billion

    AA+     Stable     Upgraded
      Master Lease Certificates of Participation (COPs)

·$116.2 million

    AA     Stable     Upgraded
      GO Commercial Paper (CP) Program     K1+           Affirmed
      GO Extendible Municipal Commercial Paper (EMCP) Program

·$507 Million (CP & EMCP Combined)

    K1+           Affirmed

In preparing this report, KBRA has spoken to State officials about their plans for new debt; reviewed the State's Annual Fiscal Report (budgetary basis) which was released on October 16, 2017; reviewed the State's most recent Audit of the Wisconsin Retirement System which was released on September 28, 2017; and also reviewed the State's 2017-2019 Biennium budget which was adopted on September 21, 2017.

KBRA's rating reflects, among other observations, that in recent years Wisconsin has consistently and accurately budgeted within its means and has prioritized a combination of tax, spending, and debt restraints that have improved the State's reserves and liquidity. The State has also simultaneously pursued policies to stabilize and reduce historically high tax burdens. Meanwhile, the economy as measured by employment and income indicators, continues to grow at a healthy pace. These factors combined with the State's large and fully funded pension system (which increasingly makes Wisconsin a positive relative outlier on the landscape of states and other large municipalities) have improved the State's operational and financial flexibility. Wisconsin recently adopted a 2017-19 biennium budget that reflects this improved flexibility. In this budget the State has chosen to make sizable but affordable increased investments in transportation, education, and other policy priorities while also prioritizing financial reserves and holding the line on taxes.

The long-term rating on the State's general obligation bonds is based on KBRA's U.S. State General Obligation Rating Methodology.

The short-term ratings on the State's CP and EMCP programs are derived from the State's long-term general obligation rating and also reflects the State's strong liquidity, history of market access, and prior authorization to retire all CP and EMCP Notes with long term bonds. For mapping of the long-term rating to the short-term rating, please refer to the short-term KBRA Rating Scale.

The Master Lease COPs rating is based on the State's long-term general obligation rating and evaluation of the factors discussed in KBRA's U.S. State Annual Appropriation Obligation Rating Methodology.

To read the report, please click here.

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About Kroll Bond Rating Agency

KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).

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