Moodys.com
Close
Please Note
We brought you to this page based on your search query. If this isn't what you are looking for, you can continue to Search Results for ""
The maximum number of items you can export is 3,000. Please reduce your list by using the filtering tool to the left.
Close
Close
Email Research
Recipient email addresses will not be used in mailing lists or redistributed.
Recipient's
Email

Use semicolon to separate each address, limit to 20 addresses.
Enter the
characters you see
Close
Email Research
Thank you for your interest in sharing Moody's Research. You have reached the daily limit of Research email sharings.
Close
Thank you!
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
New Issue:

MOODY'S ASSIGNS Aaa RATING TO THE PUBLIC BUILDING COMMISSION (PBC) OF JOHNSON COUNTY'S (KS) $14.3 MILLION TAXABLE LEASE PURCHASE REVENUE BONDS, SERIES 2010D

29 Sep 2010

Aaa RATING APPLIES TO $179.4 MILLION OF TOTAL LEASE REVENUE DEBT, INCLUDING CURRENT OFFERING

Johnson (County of) KS
County
KS

Moody's Rating

ISSUE

RATING

Taxable Lease Purchase Revenue Bonds, Series 2010D

Aaa

  Sale Amount

$14,250,000

  Expected Sale Date

09/30/10

  Rating Description

Lease Revenue

 

Opinion

NEW YORK, Sep 29, 2010 -- Moody's Investors Service has assigned a Aaa rating to the Public Building Commission (PBC) of Johnson County's (KS) $14.3 million Taxable Lease Purchase Revenue Bonds, Series 2010D. Concurrently, Moody's has affirmed the Aaa rating on the PBC's outstanding lease revenue debt. Johnson County PBC has $179.4 million in total lease revenue debt, including the current offering.

RATING RATIONALE

The current bonds are secured by Johnson County's long term contractual obligation to make lease payments to the PBC. Proceeds of the bonds will finance improvements to the County's Juvenile Service Complex, Crime Lab, and Olathe Adult Detention Center. Moody's notes the strength of the legal provisions, and the 2007 amendments to the lease agreement, base lease, and trust indenture on the PBC's lease revenue debt eliminate annual appropriation risk. Additionally, the security provided by the leasehold pledge of the essential assets financed with bond proceeds remains a credit strength. Affirmation and assignment of the highest-quality Aaa rating reflects the strong legal provisions that provide bondholder security, as well as the general obligation credit characteristics of Johnson County, which include a sizeable and wealthy tax base that benefits from its significant role in the Kansas City (GO Aa2/stable) metropolitan area with recent declines in valuation; well-managed financial operations characterized by revenue diversity and ample reserves; and affordable debt levels.

STRONG LEGAL PROVISIONS AND AMENDMENTS REMOVE APPROPRIATION RISK

Moody's believes strong legal provisions and amendments to the lease agreement, base lease and trust indenture between Johnson County and the PBC eliminate the annual risk of appropriation. The bonds are limited obligations of Johnson County, payable from lease payments from the county to the PBC. Bondholders have a leasehold interest in the assets. Previous bond proceeds have financed essential county building projects including expansion to the Adult Detention Center, emergency communications call center, and county administration building improvements. Moody's believes that the essential nature of the financed projects and the useful life of the pledged assets are well within the lease maturity.

In 2007, the county amended the lease agreements and base leases between the county and the PBC to remove language pertaining to both annual appropriation and non-appropriation risk. Moody's analysis of relevant legal documents, along with discussions with bond counsel, clarify that these amendments represent the county's intention to make lease payments per a long term contractual agreement as opposed to its former pledge of annually appropriated lease payments. The county's lease payments are now automatically included in annual budgets and cannot be terminated for the life of the lease agreements and base leases. While Johnson County is under no obligation to levy property taxes to support lease payments, Moody's notes that the lack of property tax caps for Kansas counties provides ample revenue-raising ability, an important consideration in rating the lease revenue bonds on parity with the county's general obligation unlimited tax rating.

SIZEABLE AND WEALTHY TAX BASE BENEFITS FROM SIGNIFICANT ROLE IN KANSAS CITY METROPOLITAN AREA ECONOMY; RECENT DECLINES IN VALUATION

Despite recent declines in full valuation, Moody's believes the county will continue to benefit from a diverse economy and its significant role in the larger regional area. Located in the southwest section of the metropolitan area, Johnson County's large tax base is comprised of significant residential and commercial components. The county has experienced substantial growth in recent decades, both in population and in full value. The county's sizeable $61.2 billion tax base has grown a solid pace prior to 2008. More recently, reflecting the national trends and weakness in property values, the county's full valuation declined by 2.3% between 2008 and 2009. Officials expect the taxbase to remain flat over the near term. The county's population has more than doubled since 1970, reaching a current estimated population of 548,122. The county is home to several highly rated municipalities, including Leawood (Aaa), Overland Park (Aaa), Lenexa (Aaa), Olathe (Aa1), and Shawnee (Aa2). Officials report that approximately 50% of the county's land remains available for development, primarily in the southern and western portions of the county. Mortgage registration activity has moderated from past years, and foreclosures comprise a limited portion of the county's total housing stock. Johnson County's socio-economic indices are well above national norms, with median family and per capita incomes 146% and 143% of the nation.

Johnson County is home to the offices of numerous corporate headquarters, including Sprint Nextel Corporation (senior unsecured rated Ba2/negative outlook) with 7,300 employees; CenturyLink, Inc. (Baa3/negative outlook) with 3,424 employees; and Black & Veatch Engineering Consultants with 1,810 employees. The telecommunications industry experienced a substantial contraction in the workforce in 2009, resulting in significant layoffs. Sprint's campus remained partially vacant due to the reduced workforce; however, buildings on the campus have been recently leased to new tenants including CenturyLink, Inc., Apria Healthcare Group, Inc. (Ba3/negative outlook) and JP Morgan (Aa3/negative outlook), which have brought several hundred additional jobs to the site. In addition, Black & Veatch recently announced plans to nearly rebuild and expand its corporate facility with expectations for future job growth. Johnson County residents benefit from employment opportunities throughout the larger Kansas City area. Evidencing the region's relatively strong economy, the county's unemployment rate of 5.9% for June 2010 continues to remain below the state's of 6.5% and the nation's of 9.6% for same time period.

WELL-MANAGED FINANCIAL OPERATIONS CHARACTERIZED BY REVENUE DIVERSITY AND AMPLE RESERVES

Moody's believes the county's financial operations will remain sound due to prudent financial management, ample reserves, and revenue diversity. Although the county regularly budgets for draws on General Fund reserves to fund capital expenditures, the county consistently posts annual General Fund operating surpluses largely due to conservative budgeting. As a result, the General Fund balance has grown from a healthy $60.9 million in fiscal 2003 to an ample $102.3 million in fiscal 2009. The fiscal 2009 General Fund balance equaled a strong 39.6% of General Fund revenues, which is well above the county's formal policy of maintaining a General Fund balance equal to 10% and 15% of annual revenues. The $10.5 million operating surplus was achieved despite declines in revenues from sales taxes and mortgage fees. In response to declining revenues, management implemented various expenditure controls such as eliminating vacant positions and suspending salary increases. Although the fiscal 2010 budget includes a $3.8 million General Fund balance drawdown, the county expects balanced to surplus operations similar to previous years. Moody's notes the county's history of conservative budgeting and believes that reserve levels will remain healthy.

The county's largest revenue source, ad valorem property taxes, are not capped by state or local statute, which provides the county with considerable financial flexibility. Sales and use tax collections are another main revenue source for the county. Reflective of a slowdown in economy, annual countywide sales tax collections have declined recently, at an average of 1.9% over the past five years. While Moody's recognizes the relative economic sensitivity of sales tax revenues, the potential for fluctuation in revenues is largely offset by the county's conservative budgeting for future growth. The county projects a 2% decline in sales tax revenues for fiscal 2010 from actual collections in 2009, and has identified potential expenditure reductions should sales tax revenues decline further than budgeted. Favorably, the county serves as a destination shopping area for the Kansas City metropolitan area and also draws from a sales tax base that extends beyond the immediate neighboring counties. Additionally, Johnson County voters approved an extension of a 0.25 cent countywide sales tax in August 2008, effective January 1, 2009 with no sunset date. Previously dedicated to Johnson County school districts, revenues from the renewed sales tax are targeted for public safety expenditures providing additional flexibility for general operations. Despite near-term pressures in declining sales tax revenues, the county's financial operations will continue to exhibit strength through significant revenue raising flexibility and making expenditure cuts as well as management's practice of conservative budgeting.

AFFORDABLE DEBT LEVELS

At 0.3% of full value, the county's direct debt burden is minimal. The county's overall debt burden of 3.7% is slightly above average and largely reflects the capital needs of the county's cities and school districts. With 57.6% of the county's direct debt paid in ten years, Johnson County's amortization rate is relatively slow but is still sound. All of the county's debt is fixed rate, and the county is not a party to any swap agreements.

The county has $179.4 million of outstanding lease revenue debt. Currently, maximum annuals debt services (MADs) stands at $17.1 million, which comprises 6.8% of fiscal 2009 expenditures. While the county continues to budget debt service payments, Moody's will monitor the level of lease revenue debt outstanding as it approaches closer to 10% of the county's budget.

County officials plan to issue an additional $30 million in debt through 2012 to fund wastewater projects. The debt will be backed by the county's general obligation unlimited tax pledge, although debt service is expected to be abated with collections of Equivalent Dwelling Unit (EDU) charges paid by wastewater system users. Approximately $14 million in additional debt is planned in 2011 to fund improvements to the county's Adult Detention Center, and Crime Lab and Developmental Supports building. Despite plans for additional borrowing, Moody's expects the county's debt levels to remain manageable due alternate revenue sources available for debt service repayment.

WHAT COULD CHANGE THE RATING - DOWN

-Significant erosion of the county's taxbase

-Deterioration in General Fund reserves to a level inconsistent with similarly rated credits

KEY STATISTICS

2000 Census population: 451,086 (27% increase from 1990)

2009 Estimated population: 548,122 (21.5% increase from 2000)

2009 Full value: $61.2 billion

2009 Full value per capita: $111,628

1999 Per capita income as % of US: 143.2%

1999 Median family income as % of US: 145.8%

2000 Median home value as % of US: 125.5%

Johnson County unemployment rate: 5.9% (June 2010)

Fiscal 2009 General Fund balance: $102.3 million (39.6% of General Fund revenues)

Direct debt burden: 0.3%

Overall debt burden: 3.7%

Principal amortization (10 years): 57.6%

Post-sale general obligation debt outstanding: $241.8 million

Post-sale lease revenue debt outstanding: $179.4 million (issued through the PBC)

The principal methodology used in rating the County of West Union (KS) was The Fundamentals of Credit Analysis for Lease-Backed Municipal Obligations, rating methodology published in October 2004. Other methodologies and factors that may have been considered in the process of rating this issuer can also be found on Moody's website.

REGULATORY DISCLOSURES

Information sources used to prepare the credit rating are the following: parties involved in the ratings, parties not involved in the ratings, public information, confidential and proprietary Moody's Investors Service's information, confidential and proprietary Moody's Analytics' information .

Moody's Investors Service considers the quality of information available on the credit satisfactory for the purposes of assigning a credit rating.

MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY'S is not an auditor and cannot in every instance independently verify or validate information received in the rating process.

Please see ratings tab on the issuer/entity page on Moodys.com for the last rating action and the rating history.

The date on which some Credit Ratings were first released goes back to a time before Moody's Investors Service's Credit Ratings were fully digitized and accurate data may not be available. Consequently, Moody's Investors Service provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

Please see the Credit Policy page on Moodys.com for the methodologies used in determining ratings, further information on the meaning of each rating category and the definition of default and recovery.

Analysts

Soo Yun Chun
Analyst
Public Finance Group
Moody's Investors Service

Rachel Cortez
Backup Analyst
Public Finance Group
Moody's Investors Service

Henrietta Chang
Senior Credit Officer
Public Finance Group
Moody's Investors Service

Contacts

Journalists: (212) 553-0376
Research Clients: (212) 553-1653


Moody's Investors Service
250 Greenwich Street
New York, NY 10007
USA

MOODY'S ASSIGNS Aaa RATING TO THE PUBLIC BUILDING COMMISSION (PBC) OF JOHNSON COUNTY'S (KS) $14.3 MILLION TAXABLE LEASE PURCHASE REVENUE BONDS, SERIES 2010D
No Related Data.
© 2019 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE MOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.

CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody’s publications.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.

Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating, agreed to pay to Moody’s Investors Service, Inc. for ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.

Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY250,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

​​​​​​
Moodys.com