KBRA assigns a long-term AA+ rating with a Stable Outlook to the State of Wisconsin’s (the State’s) Master Lease Certificates of Participation (COPs) of 2022, Series A. Concurrently, KBRA affirms the long-term AA+ rating with a Stable Outlook on $62 million of outstanding COPs; the long-term AAA rating with a Stable Outlook on outstanding General Obligation (G.O.) bonds; and the short-term K1+ rating on the G.O. Commercial Paper (CP) Program and G.O. Extendible Municipal Commercial Paper (EMCP) Program. The long-term COPs rating is derived from the State’s long-term G.O. rating and an evaluation of factors discussed in KBRA’s U.S. State Annual Appropriation Obligation Rating Methodology.

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Key Credit Considerations

The rating actions incorporate the following key credit considerations:

Credit Positives

• Strength and breadth of the G.O. pledge.
• Essentiality of leased assets under the Master Lease Program (the Program), supported by a strong, well established legal framework.
• Trend of conservative budgets, strong financial results, and improved reserve levels.
• Strong liquidity position based on all sources of available cash for operations.

Credit Challenges

• Potential for Omicron, along with other, yet unknown virus variants, to derail the pace of economic recovery.
• Ability to maintain a positive, GAAP basis Total Fund Balance ($1.2 billion) in successive fiscal years.

The Stable Outlook reflects KBRA’s expectation that the State’s fiscal discipline and economic resiliency will sustain its recovery in a post-pandemic environment, supporting financial performance and reserve levels commensurate with the current rating level. In KBRA’s view, there remains considerable incentive for the State to continue appropriating for assets leased under the Program.

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) is a full-service credit rating agency 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 pursuant to the Temporary Registration Regime. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

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