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State of Alaska, AIAS Credit Rating Outlook Improves

May 10, 2021

May 10, 2021 (Juneau, AK) – Alaska Governor Mike Dunleavy today announced that Standard and Poor’s Global Ratings revised the State of Alaska’s credit rating outlook to stable from negative, and reviewed and affirmed the State of Alaska’s general obligation bond rating of AA-. The May 5th revision of the outlook to stable was supported by the rating agency’s expectation of improved fiscal performance in the near term as oil-related revenue stabilizes and improved equity performance adds to reserves available in the State’s Earnings Reserve Account.

“My administration welcomes the improvement in Alaska’s credit ratings, especially during a global pandemic,” said Governor Dunleavy. “I remain committed to implementing a sustainable budget plan that includes a constitutional amendment protecting the permanent fund dividend, ensuring a healthy economy for future generations of Alaskans.”

“While Alaska’s credit rating stabilizing is encouraging, we must remain vigilant as we continue to address long-term sustainability,” Alaska Department of Revenue Commissioner Lucinda Mahoney stated. “The last decade has demonstrated that Alaska is more sensitive to economic volatility than other states and our ability to grow and maintain reserve levels while achieving a balanced budget are essential components to our fiscal environment.”

Additionally, in a May 5, 2021 credit rating release Fitch ratings revised the State of Alaska’s Alaska International Airport System’s (AIAS) revenue bond rating outlook to stable from negative and affirmed the AIAS’s A+ rating. The COVID-19 pandemic has severely impacted the airport sector with declines of up to 80% in passenger traffic and associated loss of revenue. The AIAS is fortunate to have a vibrant cargo market which has surged in fiscal year 2021 balancing pandemic-related declines in passenger enplanements. This diversity of revenue generation is recognized as a significant credit strength for AIAS. Alaska is located on the great circle route and approximately equal distance from Asia to the continental US allowing freighters that stop in Anchorage to carry significantly more cargo combined with the ability to sort and re-plane cargo for delivery to multiple lower 48 locations. The cargo activity at AIAS creates both revenue for the system as well as significant economic impact to Anchorage with as many as 1 in 7 jobs being related to the air cargo.