KBRA Assigns AA Rating with Stable Outlook to State of Louisiana General Obligation Refunding Bonds, Series 2025-A; Affirms Rating for Parity Bonds

KBRA assigns a long-term rating of AA to the State of Louisiana General Obligation Refunding Bonds, Series 2025-A and affirms the long-term rating of AA for the State's outstanding General Obligation Bonds. The rating Outlook is Stable.

Key Credit Considerations

The rating actions reflect the following key credit considerations:

Credit Positives

• Conservative budget practices and pandemic-related federal assistance have resulted in historically large reserves and liquidity as of FYE 2024.
• Low tax supported debt ratios and affordable pension commitments contribute to low fixed cost burden.
• Efforts to restructure major taxes may yield increased economic competitiveness and growth over time.

Credit Challenges

• Weak socioeconomic metrics relative to other U.S. States.
• Moderate exposure to energy price volatility reflecting its sizable oil and gas industry.
• Vulnerability of economic base to hurricane events and coastal erosion.

Rating Sensitivities

For Upgrade

• Sustained improvement in economic indicators including per capita income, employment, educational attainment and population growth.

For Downgrade

• A significant reduction in budgetary reserves and liquidity.
• Further weakening of existing trends in economic indicators.

To access ratings and relevant documents, click here.

Methodologies

• Public Finance: U.S. State General Obligation Rating Methodology
• ESG Global Rating Methodology

Disclosures

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

Doc ID: 1007923

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