Kroll Bond Ratings Agency (KBRA) has assigned a long-term rating of AA with a stable outlook to the State of Wisconsin’s $257 million General Obligation Refunding Bonds of 2014, Series 3 and $56.5 million General Obligation Refunding Bonds of 2015, Series 1. In addition, KBRA affirms the long-term rating of AA with a stable outlook on the State’s outstanding General Obligation Bonds, excluding Bonds backed by a letter of credit or liquidity facility, unless otherwise noted. After issuance of these Bonds, the State’s outstanding tax-supported long-term debt is approximately $13.9 billion.

Wisconsin’s recovery from the national recession continues to be moderately strong, as evidenced by ongoing increases in employment and lower unemployment rates than the region and the nation. KBRA views the financial condition of Wisconsin as improving as a result of ongoing recovery of the revenue base from the recession and the increased budget discipline imposed under the current administration. The State has a history of operating with structurally imbalanced budgets, dependence on the use of one time revenues and minimal reserves. Under the current administration, significant progress has been made towards structural budget balance, reflected in reduced use of one time revenues and two years of improving General Fund operating results.

In KBRA’s view, the current budget plan for FY 2014 and FY 2015 includes a level of uncertainty in that the Governor’s tax cut program is being funded by increased levels of revenues included in revenue projections revised in January 2014. In KBRA’s view, this uncertainty is mitigated to some extent by the State’s history of using conservative revenue projections in its estimates of operating results, the current Rainy Day Fund balance of $279 million and the available fund balance in the General Fund. KBRA will continue to monitor developments in the current tax reduction plan and its impact on State finances.

The rating is based on KBRA’s U.S. State General Obligation Rating Methodology published on March 28, 2012.

Please use the following links to view KBRA’s full report and tear-sheet on the State:

State of Wisconsin General Obligation Bonds 2014, Series 3 and 2015, Series 1

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).