Due to "very substantial and growing reserve balances and the continuation of conservative financial management practices at a time of strong revenue performance," Alaska's general obligation bond rating was kicked up a notch to the highest level on Monday by Fitch Ratings, according to Reuters.
That takes the rating from AA-plus to AAA, Reuters reported. Fitch Ratings, headquartered in New York and London, is one of the nationally recognized statistical rating organizations designated by the U.S. Securities and Exchange Commission in 1975. Standard & Poor's and Moody's Investor Service are the other two.
Long-term credit ratings range from from AAA (the best quality, reliable and stable) to D (has defaulted on obligations and Fitch believes it will default on most or all obligations).
Alaska's AAA rating affects about $576 million of outstanding state general obligation bonds, including the state's upcoming negotiated sale of $153.2 million of general obligation bonds and $11.9 million of taxable school construction bonds, according to Reuters.
"Conservative financial management is critical given the state's dependency on energy-related revenues and the volatility of energy prices and production. Fitch expects Alaska to prudently manage its reserve funds and promptly adjust its expenditures as needed, consistent with the state's historical practice," the company's report noted.