Kroll Bond Rating Agency Assigns Long-Term Rating of AA- to State of Wisconsin’s Master Lease Certificates of Participation of 2014, Series A
NEW YORK--(BUSINESS WIRE)--Kroll Bond Ratings Agency (KBRA) has assigned a long-term rating of AA- with a stable outlook to the State of Wisconsin’s $33 million Master Lease Certificates of Participation (COPs) of 2014, Series A. This rating applies to all of the State’s outstanding Master Lease COPs. After issuance of these COPs, the State’s outstanding Master Lease COPs will be approximately $73 million. KBRA also affirms the State’s long-term general obligation rating of AA with a stable outlook.
This 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, published on February 5, 2014.
The Master Lease Certificates of Participation of 2014, Series A are being issued under a master lease structure which provides for strong security for payment of all lease payments payable on existing and proposed COPs. Under the Master Lease, a failure to appropriate any lease payments would cause termination of the Master Lease, which would require the State to deliver possession of all leased assets under the Master Lease Program to the COP trustee. Under the Program, the State purchases a wide range of assets for use by all State agencies. The State budget includes appropriations for lease payments for the two fiscal years of each biennial period. The State Budget Office provides oversight of the inclusion of these lease payments in the State budget and lease payments are paid through an administrative process that, in KBRA’s view, provides additional assurance for payment of lease payments. In the event that the State budget passage is delayed, Wisconsin statute provides continuing authority for existing appropriations until a new budget is adopted, which, in KBRA’s view, mitigates the risk of late budget passage.
Please use the following link to view KBRA’s tear-sheet on the State: