Kansas is taking advantage of continued low interest rates with a $502.6 million taxable deal to pump money into its underfunded state retirement system. The pension obligation bonds on Tuesday’s calendar are coming through the Kansas Development Finance Authority with Citigroup as book runner. The bonds are rated Aa3 by Moody’s Investors Service and A-plus by S&P Global Ratings. Outlooks are stable. “The stable outlook reflects an expectation that Kansas has the capacity to generate the resources necessary to sustain structural balance in a period of economic stability or to withstand a moderate shock to revenue in a period of economic weakness,” said Moody’s analyst Matthew Butler. Because debt service is subject to appropriations by the Kansas Legislature, the POBs are rated a notch lower than the state’s issuer ratings.
Source: The Bond Buyer
