Friday, February 6, 2015

Moody's downgrades Unified Government's bond rating

KANSAS CITY, KAN. ---- Moody's has downgraded the Unified Government's bond rating. 

The announcement was made earlier this week by Moody's Investors.

Highlights from the announcement:
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. 
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. 
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.