Bangkok--1 Jun--Standard & Poor's
Standard & Poor's Ratings Services assigned its 'AA+' long-term rating, and stable outlook, to the state of
Washington's $391.3 million series R-2010A various purpose general obligation (GO) refunding bonds.
At the same time, Standard & Poor's affirmed its 'AA+' long-term rating and underlying rating on the state's various purpose and motor vehicle fuel tax (MVFT) GO bonds outstanding and its 'AA' rating on the certificates of participation (COPs), which are secured by state appropriations.
"The ratings reflect Standard & Poor's view of Washington's sustained period of historical employment and population growth in the past several years," said Standard & Poor's credit analyst Sussan Corson.
The ratings also reflect what we see as a relatively well-educated workforce, with good income indicators; and historically good ending reserve balances, including a constitutional rainy-day account (RDA), which have helped mitigate a biennial budget gap stemming from further reduced revenue forecasts.
Also factored into the rating are the state's somewhat concentrated, although gradually diversifying, economic and job bases in industries that we view as cyclical, such as real estate, aerospace, and high technology.
"The stable outlook reflects our expectation that the RDA, and the mechanisms by which it is funded, will help mitigate Washington's slumping economic and revenue performance this year, which will remain a challenge for the state in the upcoming biennium," Mr. Corson added.
The outlook also reflects what we see as Washington's strong financial management and our expectation that it will continue to make timely and proactive budget amendments as needed to maintain budgetary balance. Nevertheless, in Standard & Poor's view, a significant dependence on nonrecurring resources to balance the biennial budget will make it more difficult for the state to return to structural budgetary balance, particularly if future economic recovery is slower than projected, which could pressure the rating.
Washington's full faith and credit secure both the various purpose and MVFT GO bonds, although motor vehicle and special fuels excise taxes first secure the MVFT GO bonds. Series R-2010A bond proceeds will be used to refund a portion of the state's GO bonds outstanding.
RELATED RESEARCH
USPF Criteria: "GO Debt," Oct. 12, 2006
Complete ratings information is available to RatingsDirect subscribers at www.ratingsdirect.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com; select your preferred country or region, then Ratings in the left navigation bar, followed by Find a Rating.
Media Contact:
Ana Sandoval, New York (1) 212-438-5095, [email protected]
Analyst Contacts:
Sussan Corson, New York (1) 212-438-2014
Gabriel Petek, CFA, San Francisco (1) 415-371-5042
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Americas Media Relations: (1) 212-438-6667
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