DALLAS - Wichita, Kan., will take a total of $114.4 million of general obligation bonds and short-term notes to market in a competitive sale on Tuesday, the only time the city intends to issue GO debt this year.
The sale will include $52.3 million of GO bonds and $62.1 million of nine-month GO notes.
"We typically issue the bonds and notes a couple of times a year, but we don't expect to issue any additional bonds for the rest of 2009," said Kelly Carpenter, director of finance for Wichita.
"We haven't issued a lot of traditional GO debt," she said. "We only issue GO debt when we have to pay for projects.
"The city has about $20 million available this year to finance capital projects on a pay-as-you go basis, so we won't need to issue more bonds."
The city will probably issue additional short-term notes during the year, she said.
The bonds are rated Aa2 by Moody's Investors Service and AA-plus by Standard & Poor's. The short-term notes have ratings of MIG 1 from Moody's and SP-1-plus from Standard & Poor's
Kutak Rock LLP is the city's bond counsel. Financial adviser is Springsted Inc.
The city will have $485 million of GO debt after the sale, all of which is fixed rate. Wichita amortizes 84% of its debt within 10 years.
Proceeds of the short-term notes, which are set to mature in nine months, are used to provide interim financing for infrastructure projects that will service new residential developments when completed.
"Most of these are renewals," Carpenter said. "We issue the notes until the projects are completed and the property is on the tax rolls. Then we can issue GO bonds for longer-term financing."
The three series of short-term notes comprise one for $37.4 million, another for $14.2 million, and a taxable series of $10.5 million.
Proceeds from the taxable series will be used as financing for a riverfront development project in downtown Wichita, Carpenter said.
The GO bonds also include three series.
The proceeds from two of the series, for $9.6 million and $9.4 million, will finance infrastructure projects in special assessment districts. The bonds will be supported by revenue from property assessments within the districts.
Carpenter said proceeds of the third GO bond series, for $33.3 million, are dedicated to citywide projects, including fire stations and an animal shelter.
Wichita's economy remains strong, said Rob Raine, assistant director of finance, despite recent layoffs by aviation companies in the city.
"Our unemployment is about 4.6%, which is well below the national average," Raine said. "The aviation sector has softened a little recently, but they are still selling airplanes."
Residential property values have not declined significantly, Raine said, because the local market is stable.
"We didn't have a lot of speculative buying in Wichita," he said. "We're a little more conservative here, and we didn't have many adjustable rate mortgages."
Wichita is the largest city in the state, with an estimated population of approximately 360,000.
