Fitch Rates Kansas City IDA (MO) $115MM Downtown Redev District Bonds 'AA'.

CHICAGO -- Fitch has assigned an underlying rating of 'AA' to the following Kansas City Industrial Development Authority, Missouri's (KCIDA) variable-rate demand tax-exempt revenue bonds (Kansas City Downtown Redevelopment District):

--$69,500,000 series 2006A;

--$45,500,000 Series 2006B.

Fitch also affirms the 'AA' rating on approximately $431 million of outstanding KCIDA parity debt and affirms the 'AAA' rating on $236.6 million of outstanding City of Kansas City, MO, general obligation (GO) debt. The Rating Outlook is Stable for both KCIDA and the City of Kansas City.

The KCIDA's 'AA' rating on the downtown redevelopment district bonds is based on the strength of pledged revenues, as well as available general municipal revenues from the City of Kansas City, which are subject to annual appropriation. As an industrial development authority, KCIDA promotes economic growth by issuing revenue bonds secured by pledged revenues; it does not have any taxing power.

The bonds, which will sell through a syndicate led by Oppenheimer & Co. Inc., are expected to price on July 19 and close July 20. Springsted, Inc. and TKG & Associates are serving as co-financial advisors. The bonds will finance a portion of the costs related to developing the retail/entertainment district in the south loop area of downtown Kansas City, Missouri.

The ratings assigned to the series 2006A & B bonds, upon closing, will be based on: an insurance policy to be provided by Ambac Assurance Corporation (rated 'AAA' by Fitch') with respect to the long-term rating, and a standby bond purchase agreement to be provided by DEPFA BANK plc (rated 'F1+' by Fitch), with respect to the short-term rating.

The bonds are special limited obligations of KCIDA, paid solely from pledged revenues, which include incremental property, sales and income taxes within the project area. Although the pledged revenues are expected to be sufficient for debt service, the City Council of Kansas City may appropriate general city revenues to meet any debt service deficiency. Before the end of each fiscal year, the city will budget and appropriate (according to the Financing Agreement) sufficient funds to meet debt service. The trustee will give credit for other available revenues.

Kansas City's 'AAA' GO rating is based on the city's diverse economic and tax revenue structure, generally strong but recently weaker financial performance, moderately high debt levels, and excellent financial control systems. The city has achieved its financial strength through diligent management practices as it endeavored to respond to neighborhood public infrastructure needs and downtown revitalization. Increased internal funding of capital projects has limited the growth of tax-supported debt, which nevertheless has increased in recent years. Labor relations are strong and future personnel costs are expected to be within normal budget constraints. Although a weaker economy has forced the city administration to utilize reserves and significantly reduce budgetary spending and personnel levels, Fitch expects that economic gains and strong cost control will improve financial results in fiscal 2006. Continued financial deterioration or increased economic stress would lead to a lowering of the city's GO rating.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.