FOR IMMEDIATE RELEASE: July 13, 2006
Fitch and Standard & Poor's assign AA rating to downtown development bonds
Fitch Ratings and Standard & Poor's Rating Services have assigned an AA and AA- credit ratings, respectively, to $115 million on Kansas City Industrial Development Authority’s Series 2006 Kansas City Downtown Redevelopment District bonds scheduled for sale July 19.
"We have worked diligently to ensure that we are redeveloping our downtown in a responsible and prudent manner," Mayor Kay Barnes said. "The positive ratings assigned by these agencies reflect the growing optimism in our local economy and in a bright future for Kansas City’s downtown."
The proceeds from the bond sales represent the final planned phase of borrowing to support various infrastructure and site improvements in downtown Kansas City for the entertainment district.
"These favorable credit ratings are another vote of confidence and a significant milestone for the City and the downtown entertainment district. With the sale of these bonds, the City's financial obligations will be finished," City Manager Wayne A. Cauthen said.
Standard & Poor's rating reflects the city's pledge to pay debt service, subject to annual appropriation. Standard & Poor's also affirmed its AA rating on the city's general obligation debt. This rating reflects the city's position as the regional center of a strong and diverse economic base; growing population and tax base with potential growth north of the river; and satisfactory financial position.
Standard & Poor's bases its "stable" outlook on the expectation that the city will return to balanced financial operations and rebuild its reserves as the local economy improves. The outlook also reflects the expectation that the city's debt burden will moderate as its population and tax base continue to grow.
Fitch's rating is based on the strength of pledged revenues and general municipal revenues from the city, subject to annual appropriation. Fitch also affirmed its AAA rating on the City's general obligation debt, based on a diverse economic and tax revenue structure, generally strong financial performance, moderately high debt levels and excellent financial control systems.
Fitch reports that the city has achieved financial strength through diligent management practices as it has responded to neighborhood public infrastructure needs and downtown revitalization. The organization expects that economic gains and strong cost control will improve the city's financial results in fiscal 2006.
Last week Moody's Investor Services upgraded its credit rating for $180 million in Series 2005 Kansas City Downtown Redevelopment District bonds from A3 to A2, and assigned an A2 rating to $115 million Series 2006 Kansas City Downtown Redevelopment bonds.
Media inquiries about this issue should be directed to City Treasurer Randall Landes, Finance Department, (816) 513-1024.