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Kroll Bond Rating Agency Assigns Long-Term Rating of AA to State of Wisconsin’s $237.1 million General Obligation Bonds of 2014, Series A

January 27, 2014

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 Wisconsinís $237.1 million General Obligation Bonds of 2014, Series A. In addition, KBRA affirms the long-term rating of AA with a stable outlook on the Stateís outstanding General Obligation Bonds, excluding Bonds backed by a letter of credit or liquidity facility. After issuance of these Bonds, the Stateís outstanding tax-supported long term debt is approximately $13.6 billion . In November of 2010, Scott Walker was elected Governor of Wisconsin and took office in January of 2011. Walker, a Republican, ran on a platform of job creation and tax cuts for individuals and businesses and reductions in government spending. The FY 2014-FY 2015 Biennium Budget included income tax relief for individuals, which reduced income tax rates across tax brackets with the largest reductions for income ranges between $15,000 and $50,000 . These changes, which were effective for 2013 tax year, are projected to reduce income tax revenues by $650 million in FY 2014. In the State of the State address last week, the Governor proposed using ending General Fund balances currently projected for FY 2014 and FY 2015 to reduce income taxes. This current proposal by the Governor introduces a level of uncertainty into State financial operations in that projected revenues are being used to fund the proposed tax cuts. In KBRAís view, this uncertainty is mitigated by the conservative nature of the Stateís revenue projections and the current Rainy Day Fund balance of $279 million . The rating is based on KBRAís U.S. State General Obligation Rating Methodology published on March 28, 2012 . Please use the following links to view KBRAís full report and tear-sheet on the State: State of Wisconsin General Obligation Bonds of 2014, Series A State of Wisconsin Tear Sheet G.O. Bonds of 2014, Series A About Kroll Bond Rating Agency KBRA was established in 2010 by Jules Kroll to restore trust in credit ratings by creating new standards for assessing risk and by offering accurate, clear and transparent ratings. 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). Kroll Bond Rating Agency Analytical: Kate Hackett , 646-731-2304 Managing Director khackett@krollbondratings.com or Brittni Smith , 646-731-2352 Analyst bsmith@krollbondratings.com Source: Kroll Bond Rating Agency


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