News from City Hall
City Communications Office
City of Kansas City, Mo.
FOR IMMEDIATE RELEASE: March 21, 2012
City completes $75.265 million special obligation bond issuance
The City of Kansas City, Mo., successfully issued a total of $75.265 million in special obligation improvement and refunding bonds on Thursday, March 15. The bonds were issued in two series; Series 2012A was issued as tax-exempt in the amount of $15.985 million, and Series 2012B was issued as taxable in the amount of $59.28 million.
The proceeds of the Series 2012A bonds will be used to acquire and install a new revenue collection system for the City, as well as to fund infrastructure improvements. The proceeds of the Series 2012B bonds will be used to finance real estate acquisition and blight remediation for the 63rd and Prospect redevelopment project, refinance a portion of a variable rate note and fulfill a contractual obligation related to construction of downtown residential housing. The Series 2012B bonds were also used to refund three outstanding bond issues in the amount of $27.635 million to achieve debt service savings, on a present value basis, totaling $2.57 million and 10.73 percent of refunding principal.
The effective interest rates for the Series 2012A bonds and 2012B bonds were 3.92 and 4.44 percent, respectively. The underlying credit ratings on the transaction were AA-, A1 and A+ by Standard & Poor's, Moody's Investors Service and Fitch Ratings, respectively.
"The completion of this financing will allow several important projects to move forward,” said Mayor Sly James. “The implementation of the new revenue system should improve efficiencies in revenue collection. Moving the 63rd and Prospect redevelopment project forward will reduce blight in our city and improve the Prospect corridor.”
The City used the negotiated method of sale with George K. Baum & Company serving as senior manager of the underwriting team along with Wells Fargo Securities, and Valdes and Moreno. FirstSouthwest and Moody Reid Financial Advisors served the City on the transaction as co-financial advisers. Kutak Rock LLP and The Hardwick Law Firm served as co-bond counsel. Disclosure counsel was handled by King Hershey, PC, Clayborn & Associates, LLC and Jane Hart Law Offices, LLC. Bryan Cave LLP served as counsel to the underwriters.
"Despite some of the toughest market conditions in months, I am pleased that we were able to lock in very low interest rates, complete the funding for these projects, and also achieve significant savings on the refunding portion of the bonds," said Director of Finance Randall Landes.
Media inquiries and other requests for more information about this issue should be directed to City Treasurer Tammy Queen, Finance Department, at 816-513-1019.