News from City Hall
City Communications Office
City of Kansas City, Mo.
CONTACT: City Communications Office, 816-513-1349
FOR IMMEDIATE RELEASE: May 23, 2011
City completes $177.53 million refunding bond issue for downtown entertainment district
On May 19, 2011, the City of Kansas City, Mo., through its Industrial Development Authority, successfully issued $177.53 million in tax-exempt refunding bonds related to its downtown entertainment district.
The bond proceeds and $3.675 million in net premium received from bond purchasers provide $175.97 million to refund the Industrial Development Authority’s Series 2006A, Series 2006B and Series 2005B variable rate demand obligations. The effective interest rate on the refunding bonds will be 4.69 percent and will provide budget certainty for the City through the fixed rate payments.
Mayor Sly James was pleased with the results of the sale.
“This refunding reduces the City’s variable rate exposure and eliminates a number of risks associated with variable rate debt. The addition of budget certainty with respect to the payments will serve the City well as we look toward economic recovery,” Mayor James said.
The City used the negotiated method of sale with Oppenheimer & Co. Inc. as senior manager; J.P. Morgan as co-senior manager of the underwriting team along with Loop Capital Markets; Wells Fargo Bank, N.A.; Harvestons Securities, Inc.; Piper Jaffray & Co.; Stifel, Nicolaus & Company, Incorporated; Stern Brothers & Co.; and Valdes & Moreno, Inc. The offering targeted both retail and institutional investors.
FirstSouthwest and Moody Reid Financial Advisors served the City on the transaction as financial advisers. Kutak Rock LLP and Hardwick Law Firm LLC served as bond counsel. Bryan Cave LLC served as counsel to the underwriters.
The underlying credit ratings on the transaction were A+/AA-/A1 by Fitch Ratings, Standard & Poor's and Moody's Investors Service, respectively. All three rating agencies indicate a stable outlook for the City’s general credit.
Although there were unsold balances at the end of the order period, the underwriting team showed support for the City by underwriting some significant balances.
“Overall, we are very pleased with the sale results and the performance of the underwriting team under difficult market conditions,” said Randall J. Landes, director of Finance.
Media inquiries and other requests for information about this issue should be directed to City Treasurer Tammy Queen at 816-513-1024.