Alaska will offer about $31 million in long-term debt today, its first sale since 2013, for a project aimed at improving the care of native residents who travel at least 90 miles for health services.
Proceeds from the certificates of participation will go toward building a 170-room housing facility attached to Anchorage’s Alaska Native Medical Center through an elevated pedestrian sky bridge, according to deal documents.
Having housing improves care for rural residents, who have to travel for health services and stay in other areas in the city otherwise -- about half of the center’s patients, said Deven Mitchell, Alaska’s debt manager, by telephone from Juneau.
In addition, the project “diminishes the use of Medicaid in the state,” he said. Those in rural areas “live on the land in some cases and don’t have much declarable income,” he said.
The non-profit medical center provides services to more than 140,000 Alaska Native and American Indian people. The residential facility will also feature family housing, a kitchen and a business center, according to the documents.
Alaska is the largest U.S. state by size and derives 90 percent of its revenue from the oil and gas industry, according to the documents.
The debt, offered to individual investors today, is the first long-term deal since January 2013, when Alaska sold $150.5 million of tax-exempt and $11.9 million in taxable securities, Mitchell said. The state has about $1.1 billion in debt backed by appropriations and its general-obligation pledge.
Moody’s Investors Service grades the new securities Aa1, one step below the state’s top rank, because the legislature must appropriate payments. Standard & Poor’s and Fitch Ratings also assign the 49th state AAA.
Debt from Alaska issuers is earning 5.46 percent this year, lagging behind the $3.7 trillion muni market’s 7.04 percent return, according to Barclays Plc data.
Alaska joins localities offering $2.7 billion in debt this week, down from $4.4 billion last week, ahead of the U.S. Labor Day holiday.