Assigns A1 to $61M GO bonds, Series 2015 A-D
New York, January 30, 2015 --
Moody's Rating
Issue: General Obligation Improvement Bonds, Series 2015-A;
Rating: A1; Sale Amount: $29,995,000;
Expected Sale Date: 02/05/2014; Rating Description: General
Obligation
Issue: Taxable General Obligation Improvement and Refunding Bonds,
Series 2015-B; Rating: A1; Sale Amount: $3,850,000;
Expected Sale Date: 02/05/2014; Rating Description: General
Obligation
Issue: General Obligation Improvement Bonds, Series 2015-C
(Wyandotte County Project); Rating: A1; Sale Amount:
$5,255,000; Expected Sale Date: 02/05/2014;
Rating Description: General Obligation
Issue: General Obligation Refunding Bonds, Series 2015-D;
Rating: A1; Sale Amount: $21,955,000;
Expected Sale Date: 02/05/2014; Rating Description: General
Obligation
Opinion
Moody's Investors Service has assigned an A1 rating to the Unified Government
of Wyandotte County/Kansas City's, KS $29.9 million
General Obligation Improvement Bonds, Series 2015-A,
$3.9 million Taxable General Obligation Improvement and
Refunding Bonds, Series 2015-B, $5.3
million General Obligation Improvement Bonds, Series 2015-C,
and $21.9 million General Obligation Refunding Bonds,
Series 2015-D. Concurrently, Moody's has downgraded
to A1 from Aa3 the ratings on the government's outstanding long-term
general obligation and Public Building Commission (PBC) Bonds, Series
2013-A. Additionally, Moody's has downgraded to A3
from A2 the rating on the government's outstanding Special Obligation
Annual Appropriation Bonds, Series 2010-H. Post-sale,
the government will have $324 million of long-term general
obligation debt outstanding; $73 million of short-term
general obligation debt outstanding (not rated by Moody's); $8.1
million of appropriation-backed debt and $9.45 million
PBC debt outstanding which are both rated by Moody's. The outlook
has been revised to stable.
SUMMARY RATING RATIONALE
The downgrade to A1 reflects the county's inability to achieve operational
balance resulting in narrow General Fund reserves and liquidity compared
to similarly rated credits; dependence on economically sensitive
revenues; below average socioeconomic income indices; and a
high debt burden that is not expected to decline in the near term.
OUTLOOK
The stable outlook reflects our belief that the government's financial
position will improve but remain somewhat limited in the near term,
given a variety of revenue raising and expenditure reduction measures.
The outlook also reflects ongoing commercial and residential development,
which should allow for some revenue growth.
WHAT COULD MAKE THE RATING GO UP
• Significant tax base growth
• Substantial improvement in residential wealth indices
• Improvement in reserve levels and multiple years of structural
balance and positive operations
WHAT COULD MAKE THE RATING GO DOWN
• Continued structural imbalance resulting in further declines in
reserves and/or liquidity
• Significant increases in the Government's debt burden
OBLIGOR PROFILE
The Unified Government of Wyandotte County/Kansas City is the state's
third largest metro area. The government serves as a regional center
for manufacturing, transportation, health care and retail.
The tax base is large totaling $1.2 billion in assessed
values in fiscal 2014; a corresponding $6.9 billion
in estimated actual value.
LEGAL SECURITY
The general obligation unlimited tax bonds are payable from ad valorem
taxes levied on all the taxable property within the county including real,
personal, and public service property, and any other monies
available for such purpose without legal limitation as to rate or amount.
The Series 2013-A PBC bonds are secured by the Unified Government's
long term contractual obligation to make lease payments to the PBC that
is not subject to annual appropriation.
The Series 2010-H Special Obligation Annual Appropriation bonds
are secured by a special obligation of the Unified Government payable
from any available funds to be annually appropriated.
USE OF PROCEEDS
Proceeds from the sale of the bonds will pay for various capital improvement
projects and equipment purchases for the government. Additionally,
the Series 2015-B and Series 2015-D will refund certain
maturities of government's outstanding Series 2006-B bonds and
Series 2006-A bonds, respectively.
RATING METHODOLOGY
The principal methodology used in the general obligation rating was US
Local Government General Obligation Debt published in January 2014.
The principal methodology used in the lease-backed rating and the
Series 2010-H debt was The Fundamentals of Credit Analysis for
Lease-Backed Municipal Obligations published in December 2011.
Please see the Credit Policy page on www.moodys.com for
a copy of these methodologies.
REGULATORY DISCLOSURES
For ratings issued on a program, series or category/class of debt,
this announcement provides certain regulatory disclosures in relation
to each rating of a subsequently issued bond or note of the same series
or category/class of debt or pursuant to a program for which the ratings
are derived exclusively from existing ratings in accordance with Moody's
rating practices. For ratings issued on a support provider,
this announcement provides certain regulatory disclosures in relation
to the rating action on the support provider and in relation to each particular
rating action for securities that derive their credit ratings from the
support provider's credit rating. For provisional ratings,
this announcement provides certain regulatory disclosures in relation
to the provisional rating assigned, and in relation to a definitive
rating that may be assigned subsequent to the final issuance of the debt,
in each case where the transaction structure and terms have not changed
prior to the assignment of the definitive rating in a manner that would
have affected the rating. For further information please see the
ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.
Regulatory disclosures contained in this press release apply to the credit
rating and, if applicable, the related rating outlook or rating
review.
Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody's legal entity that has issued
the rating.
Please see the ratings tab on the issuer/entity page on www.moodys.com
for additional regulatory disclosures for each credit rating.
Tatiana Killen
Analyst
Public Finance Group
Moody's Investors Service, Inc.
100 N Riverside Plaza
Suite 2220
Chicago, IL 60606
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Adebola Kushimo
Asst Vice President - Analyst
Public Finance Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Moody's downgrades the rating on the Unified Government of Wyandotte County/Kansas City, KS GO Debt to A1 from Aa3 and Downgrades the Government's Special Obligation Annual Appropriation Debt to A3 from A2; outlook revised to stable