AIDEA earns highest bond rating in its history, strengthening Alaska development financing

By SUZANNE DOWNING

The Alaska Industrial Development and Export Authority has received an AA+ bond rating from S&P Global Ratings, the highest rating in the agency’s history and one that places it among the strongest state-affiliated development finance authorities in the country.

The rating is EVEN higher than that of the State of Alaska, which has an S&P rating of AA.

S&P assigned the AA+ rating with a stable outlook to AIDEA’s Series 2026A and 2026B revolving fund bond anticipation notes in a report issued last week. The rating reflects what S&P described as AIDEA’s exceptionally strong financial profile, large reserves, and robust loss-coverage capacity, even under severe stress scenarios.

The AA+ rating allows AIDEA to borrow at lower interest rates, which reduces financing costs for infrastructure, energy, and economic development projects across Alaska. Lower borrowing costs also translate into more affordable financing for Alaska businesses and communities and expand the authority’s ability to support job creation statewide.

“This milestone will help us further our mission to stimulate job creation, investment and sustainable economic opportunity for all Alaskans,” the authority said in a statement following the rating announcement.

AIDEA Acting Board Chairman Bill Kendig credited the agency’s leadership and fiscal discipline for the upgrade.

“AIDEA’s AA+ bond rating from S&P is a milestone we’re proud of,” Kendig said. “It reflects the exceptional work of Executive Director Randy Ruaro and his staff, and it affirms our disciplined financial management and strategic investments that strengthen Alaska’s communities and businesses.”

S&P’s analysis cited AIDEA’s large reserve balances, overcollateralization, and consistent operating performance, noting that the authority could absorb even extreme loan default scenarios while continuing to meet debt obligations. The rating agency also highlighted the absence of loan defaults or delinquencies in the most recent fiscal year and the authority’s conservative financial policies.

Executive Director Randy Ruaro said the rating reflects record financial performance over the past two years and strategic investments tied to Alaska’s resource economy.

“AIDEA has successfully built a strong financial foundation, delivering record returns over the past two years,” Ruaro said. “This performance earned AIDEA a prestigious AA+ bond rating which is higher than the State of Alaska and equal to the Alaska Housing Finance Corporation.”

Ruaro pointed to investments in large-scale resource development projects such as the Red Dog road and port, which he said generate returns of 10% or more for AIDEA and substantial additional revenue for the state through dividends, taxes, and royalties.

“Combined returns to AIDEA and the state can reach or exceed 22%,” Ruaro said. “Investments in resource development projects are essential for Alaska’s financial stability and growth.”

S&P noted that AIDEA routinely pays dividends to the State of Alaska and maintains significant cash and investment reserves to support both lending activity and debt service. The AA+ rating affirms AIDEA’s position as one of the strongest development finance authorities in the nation and enhances its capacity to finance major projects critical to Alaska’s economy.

The Alaska Industrial Development and Export Authority earlier this month reported a record-setting year in its audited financial results for the fiscal year ending June 30, posting a statutory net income of $67.4 million, the highest in the authority’s history.

AIDEA’s board also declared a $17 million dividend to the State of Alaska, bringing total dividends paid to the state since AIDEA’s creation to $512 million. The agency said the results reflect its ongoing focus on economic development and long-term growth across Alaska.

AIDEA announces dividend to be paid to State of Alaska’s General Fund