Wyandotte Times

Moody's Assigns A1 to Unified Government General Obligation Bonds

Moody's Investors Service has assigned an A1 rating to the Unified Government of Wyandotte County/Kansas City, KS' (UG) $42.3 million General Obligation Improvement Bonds, Series 2023-A and MIG 1 ratings to the $44.8 million Municipal Temporary Notes, Series 2023-I and $6.5 million Municipal Temporary Notes, Series 2023-II.

"This is great news for the Unified Government," said Debt Program Coordinator A. Villarreal. "The affirmation of our credit ratings are a high priority for the Unified Government because it ensures our continued ability to affordably access the capital markets in order to finance our capital improvement needs." 

Moody's has affirmed the following ratings:

•    A1 issuer rating;

•    A1 rating on the outstanding general obligation unlimited tax (GOULT) bonds;

•    A1 rating on the outstanding revenue bonds issued by the Unified Government of Wyandotte County/Kansas City Public Building Commission, KS (PBC) for which the UG is the obligor;

•    A3 rating on the outstanding Taxable Special Obligation Annual Appropriation Refunding Bonds, Series 2020-D;

•    MIG 1 on the outstanding temporary notes.

The UG will have $1.3 billion in total debt post-sale. The outlook is stable.

RATINGS RATIONALE

The A1 issuer rating reflects a large and growing economy favorably located near employment centers in Johnson County, KS (AAA stable) and Kansas City, MO (AA3 stable), modestly growing population, and below median resident income. The rating also incorporates satisfactory financial performance but reserves are below median for the rating category. The rating further reflects the UG's elevated long-term liabilities and fixed costs ratios that will continue to grow because of a growing pension burden and significant future debt plans. The A1 rating on the GOULT bonds is at the same level as the issuer rating. The GOULT bonds are backed by the UG's full faith and credit pledge, and are paid from a dedicated property tax that is not limited by rate or amount and is levied on all taxable property within the UG, excluding certain incorporated and unincorporated areas. The A1 rating on the outstanding revenue bonds issued by the PBC is the same level as the issuer rating and reflects the more essential nature of the financed projects and the strength of legal provisions including the lack of annual appropriation, early cancellation, or termination risk. The A3 rating on the outstanding Series 2020-D bonds reflects a two notch distinction from the issuer rating and incorporates the annual risk of non-appropriation and the less essential purpose of the original financing (construction of a surface parking lot). The MIG 1 rating reflects the underlying long-term credit quality of the UG reflected in its issuer rating, history of consistent market access and satisfactory cash position at the time of issuance

RATING OUTLOOK

The stable outlook reflects the expectation that continued economic expansion, utility rate increases, and bolstered financial policies will enable the UG to maintain balanced operations over the near term and will help to provide the necessary revenue to afford increasing debt service.

FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS:

•    Strengthening of full value per capita and resident income

•    Material, sustained improvement in fund balance and liquidity

•    Significant decline in long-term liabilities ratio

•    Not applicable (short-term notes)

FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS

•    Weakened economic metrics

•    Trend of operational imbalance and/or decline in reserves

•    Material increase in long-term liabilities or associated fixed costs

•    Downgrade of the UG's issuer rating (short-term notes)

•    Significant decline in liquidity (short-term notes)

Original source can be found here.