In addition, Fitch affirms its 'AA+' rating on
The Rating Outlook is Stable.
The bonds are special obligations of the state of
KEY RATING DRIVERS
DIVERSE REVENUE STREAM SUPPORTS BONDS: Bonds are secured by a gross lien on the SHF, which receives a diverse stream of broad-based revenues. Revenues credited to the fund are subject to legislative alteration, although certain monies are constitutionally dedicated to transportation.
STRONG DEBT SERVICE COVERAGE: The state covenants to ensure that revenues to the SHF equal no less than 3x annual debt service. Actual annual and maximum annual debt service (MADS) coverage has been well in excess of this requirement.
FUTURE BORROWING IS LIMITED: Issuance of additional highway revenue bonds requires 3x coverage of MADS. Additional leveraging is also limited such that MADS may not exceed 18% of current or future SHF revenues.
The rating is sensitive to the performance of pledged revenues and debt service coverage.
The 'AA+' rating reflects the diverse stream of broad-based revenues in the SHF, along with the protections afforded by the strong 3x MADS additional bonds test. The legislature has altered, and may well continue to alter, the components and/or distribution formulas of the revenues credited to the fund. However, bondholders are insulated from the changes to the extent that the state has covenanted to maintain revenues in the highway fund at least equal to 3x coverage of annual debt service. In addition, certain revenues are constitutionally dedicated to transportation.
The bonds are secured by and payable from a gross pledge of all revenues in the SHF, including motor fuel taxes, a portion of the state's general sales and use tax, and federal aid. Constitutionally dedicated transportation revenues include 66.37% of state motor fuel tax receipts and a percentage of vehicle registration and license fees. Combined, these constitutionally dedicated revenues alone totaled roughly
The SHF's allocation of the state's sales and use taxes statutorily increased for the fiscal year beginning
MADS coverage by fiscal 2013 revenues (excluding both federal and local funds) is 4x; when including future debt issues under the capital program described below, MADS by fiscal 2013 revenues remains a solid 3.84x. MADS coverage at full program issuance by fiscal 2014 revenues (including federal aid) is 6.7x; decreasing to 4.77x when federal aid is excluded.
KDOT has shown a long-standing commitment to planning, developing, and operating various modes of transportation across the state. KDOT's current transportation improvement program, Transportation Works for
Following the current issue, a total of
Additional information is available at 'www.fitchratings.com'.
--'Tax-Supported Rating Criteria' (
--'U.S. State Government Tax-Supported Rating Criteria' (
Tax-Supported Rating Criteria
U.S. State Government Tax-Supported Rating Criteria
Source: Fitch Ratings
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