KANSAS DEPT. OF TRANSPORTATION BONDS RATED 'AA' BY FITCH -- FITCH FINANCIAL WIRE --
KANSAS DEPT. OF TRANSPORTATION BONDS RATED 'AA' BY FITCH
-- FITCH FINANCIAL WIRE --
NEW YORK, March 4 /PRNewswire/ -- Kansas Department of Transportation's approximately $250 million Highway Revenue Bonds, Series 1992 are rated "AA" by Fitch. The bonds are expected by negotiated sale through a syndicate led by Smith Barney, Harris Upham & Co. Inc. on or about March 17. The credit trend is stable.
This issue is the first installment of an authorized $890 million bonding program to be financed through fiscal 1996-97 as part of the state's comprehensive highway program adopted by the 1989 legislature. The program, in excess of $5.5 billion, is intended to maintain and improve the state's highway system and is the state's major capital focus.
Limited by the Master Resolution to a 20-year maturity, the bonds are special obligations of the state, secured by and payable from a gross pledge of all revenues in the State Highway Fund, the general operating fund for the department. While no specific revenues are pledged to the bonds, the state has covenanted to maintain revenues transferred or credited to the fund in an amount at least equal to 3.0x coverage of annual debt service. Issuance of additional bonds requires historic coverage of 3.0x maximum annual debt service.
The State Highway Fund benefits from a broad-based and diverse revenue stream, although the legislature may (and has) alter the components and distribution formulas of the revenues credited to the fund. The fund currently includes the constitutionally dedicated state transportation revenues (fuel taxes and trip permits), net after meeting $18.5 million debt service requirements on the outstanding Freeway Bonds due through 1998, 5.88 percent of the 4.25 percent state sales and compensating use tax, a transfer of 10 percent of the retailers sales tax credited to the general fund, and vehicle registration and license fees. Tax increases applicable through 1993 were implemented at the time of the program's inception. Wide coverage margins exist, with projected maximum debt service for the full authorization ($85.8 million in 1997-98) covered 4.0x by actual 1989-90 revenues and 5.1x by projected 1992-93 revenues. Estimates appear conservative, forecasting no revenue growth and a 5.2 percent annual inflation factor.
/CONTACT: Claire G. Cohen, 212-908-0552, or Ruth Corson Maynard, 212-908-0596, both of Fitch/ CO: Kansas Dept. of Transportation ST: Kansas IN: TRN SU: RTG TS -- NY046 -- 4902 03/04/92 11:11 EST