District Down, Then Up

Fitch Ratings last week downgraded its rating on the 2007 debt of the I-470 and 350 Transportation Development District to BBB-plus from A, though the rating is rising to A-minus due to Fitch’s ongoing recalibration of municipal ratings.

The rating action affects the district’s $16.5 million of sales tax refunding and improvement revenue bonds from that year.

The downgrade reflects the recent volatility of the retail industry beyond the level expected, and the potential for reduced sales tax revenue given the current economic decline, according to analysts.

The bonds are backed by revenue generated in the retail district from a 1% sales tax secure. The tax is subject to annual appropriation. It was approved by voters in 2001.

In the district’s favor, it is currently fully occupied, has an established history of revenue generation, and faces limited competition. The district also benefits from its location in the southeastern suburbs of Kansas City.

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Transportation industry
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