S&P: North Kansas City Levee District, MO Improvement Bond Rating Affirmed At 'A-'; Removed From CreditWatch
We placed the rating on CreditWatch with negative implications following the discovery of an error in the application of our criteria. The error was in relation to not applying stress tests as required by our special-purpose districts criteria, published June 14, 2007 on RatingsDirect. At bond issuance and in subsequent reviews, we determined that the inherent flexibilities in the levy allowed the district to pass certain sensitivity analyses without performing the stress tests. After further clarification, we determined that levy limitations may result in the sensitivity analyses' not always being passed.
"The removal of the rating from CreditWatch is based on application of the stress tests and, with consideration of other revenue flexibilities, a determination that the 'A-' rating is still accurate and reflective of the credit quality," said S&P Global Ratings credit analyst Benjamin Gallovic.
The 'A-' rating reflects our view of such factors as the district's strong underlying area economy, mostly developed tax base, strong value-to-lien (VTL) ratios, and additional liquidity and revenue flexibility.
The stable outlook reflects our anticipation that the district will have limited additional debt needs while maintaining strong VTL ratios.