Summary: Kansas Department of Transportation; Gas Tax

S&P Global Ratings has lowered its long-term rating on the Kansas Department of Transportation's (KDOT) outstanding highway revenue bonds by two notches to 'AA' from 'AAA'. The outlook is stable. The downgrade reflects the application of our "Priority Lien" criteria (published Oct. 22, 2018, on RatingsDirect), which factors in both the strength and stability of the pledged revenues, as well as the general credit quality of Kansas as the obligor which collects and transfers the pledged revenue for debt service payment (the obligor's creditworthiness [OC]). The priority-lien rating on these bonds is limited by our view of the gas tax revenues' close relationship to Kansas' creditworthiness [general obligation (GO) rating of 'AA-/Stable'] and is constrained to one notch above the

...S&P Global Ratings has lowered its long-term rating on the Kansas Department of Transportation's (KDOT) outstanding highway revenue bonds by two notches to '##' from '###'. The outlook is stable. The downgrade reflects the application of our "Priority Lien" criteria (published Oct. 22, 2018, on RatingsDirect), which factors in both the strength and stability of the pledged revenues, as well as the general credit quality of Kansas as the obligor which collects and transfers the pledged revenue for debt service payment (the obligor's creditworthiness [OC]). The priority-lien rating on these bonds is limited by our view of the gas tax revenues' close relationship to Kansas' creditworthiness [general obligation (GO) rating of '##-/Stable'] and is constrained to one notch above the state's creditworthiness. The one-notch upward limitation on the gas tax rating compared to the state's GO rating reflects our view that the bonds do not benefit from limited scope of operations or extraordinary expenditure...

Summary