OREANDA-NEWS. Fitch Ratings has affirmed the ratings on the following bonds:

--I-470 & 350 Transportation Development District (MO) (I-470 & 350 TDD):
--$11.3 million outstanding transportation sales tax refunding and improvement revenue bonds, series 2007, rated 'A-'.

Unified Government of Wyandotte County/Kansas City (KS) (Wyandotte):
--$76 million subordinate lien capital appreciation series 2010B bonds (redevelopment project area B), rated 'A-'.

Gravois Bluffs Transportation Development District (MO) (Gravois Bluffs TDD):
--$15.5 million transportation sales tax revenue bonds, series 2007, rated 'BBB'.

The ratings have been removed from Rating Watch Evolving and assigned a Stable Outlook.

SECURITY
I-470 & 350 TDD and Gravois Bluffs TDD: The bonds are limited obligations of their respective districts, secured by a voter-approved 1% sales tax. Sales tax revenues are subject to annual appropriation; however, revenues are stranded if not appropriated, minimizing appropriation risk. Additionally, there are cash-funded debt service reserves of $1.4 million for I-470 & 350 TDD and $2 million for Gravois Bluffs TDD.

The bonds for Wyandotte are special limited obligations payable from a senior lien on sales and hotel taxes collected within Village West.

KEY RATING DRIVERS

RATING OUTLOOK REVISION: The change in the Rating Outlook of all three bonds to Stable from Rating Watch Evolving reflects the completion of Fitch's review of debt secured by sales taxes generated from highly concentrated retail or commercial center operations. Fitch believes that the structural features of the bonds, particularly turbo provisions that result in projected full retirement of remaining bonds well in advance of their stated final maturity, substantially reduce exposure to commercial risk. Under assumed no-growth scenarios, the I-470 & 350 TDD and Gravois Bluffs TDD bonds would both be fully paid by 2020 while the Wyandotte bonds are projected to be retired by 2016.

PAYER CONCENTRATION: Pledged revenues supporting the bonds are generated within highly concentrated bases of retail establishments. Collections of pledged revenues are dependent upon continuous operation of these retail centers.

NEGLIGIBLE APPROPRIATION RISK: For the I-470 & 350 and Gravois Bluffs TDD bonds, the application of pledged sales taxes to the bond repayment is subject to annual appropriation by the districts. Appropriation risk is considered to be negligible as sales tax revenues remain stranded if not appropriated, eliminating any incentive to not appropriate.

WYANDOTTE/KANSAS CITY RATING: The 'A-' rating on the Wyandotte bonds is based on decreased leverage from accelerated bond redemptions which are expected to fully retire the debt next year.

I-470 & 350 TDD RATING: The 'A-' rating on the I-470 & 350 bonds reflects the area's strong economic profile, solid legal structure including a prohibition on additional debt and superior resiliency under stress scenarios that offset the small and highly concentrated commercial tax base.

GRAVOIS BLUFFS TDD RATING: The 'BBB' rating on the outstanding Gravois Bluffs TDD bonds incorporates commercial risk balanced by strong commercial performance to date and the probability of early retirement of debt through turbo redemptions. Weaknesses include the potential for significant additional leverage and an adequate but somewhat lesser ability to handle stress than with I-470 & 350 TDD.

RATING SENSITIVITIES

REVENUE PERFORMANCE AND COVERAGE: The ratings are sensitive to continued performance of the concentrated retail areas comprising the districts. Significant deterioration of pledged revenues resulting in an extension of debt service beyond current projections could lead to a negative rating action.

CREDIT PROFILE

Fitch placed all three ratings on Rating Watch Evolving as part of its review of debt secured by sales taxes generated from highly concentrated retail or commercial center operations (see 'Fitch Places Five U.S. Retail/Commercial Center Sales Tax Bonds on Rating Watch Evolving' dated July 30, 2015). Since then two of the five bonds that were part of the review have been refunded.

As the bonds are either exclusively or primarily payable from sales taxes derived from commercial operations, the overall performance of retail and commercial facilities within the districts is critical to their repayment.

Fitch views favorably the bond structure of all three issues as they require that pledged revenues in excess of administrative costs and debt service must be used to prepay outstanding principal. This turbo feature has resulted in prepayment of a significant portion of principal for each of the bonds and projected full retirement well before their scheduled final maturities. Assuming no further growth in pledged revenues, the Wyandotte bonds would be fully retired in 2016 while the Gravois Bluffs and I-470 & 350 TDD bonds would be fully paid by 2020. The short-term expected life of the bonds tempers the long-term risks associated with commercial enterprises, supporting the current bond ratings.

Below is a brief summary of each of the bonds.

GRAVOIS BLUFFS TDD, MO

The district is located within the Fenton Gravois Bluffs TIF district. Development consists of a 372,759 square foot retail center anchored by a Wal-Mart Supercenter. Fifty percent of the 1% sales tax was allocated to the TIF district until the earlier of: no TIF debt is outstanding, or, the expiration of the TIF district in October 2021. The TIF district's bonds were fully repaid on Oct. 1, 2013. Therefore, the district now benefits from receipt of the full 1% sales tax. As a result, debt service coverage improved materially in fiscal 2014, increasing to 3.5x compared to 1.8x the prior year. Maintenance of strong debt service coverage in fiscal 2015 is expected, based on year-to-date sales tax collections; sales tax collections from January through September 2015 are up 16% compared to the same time period in 2014, and are equal to 88% of total sales tax collections in 2014.

Current projections show that the bonds under a no-growth scenario will be retired in 2020, well in advance of the final bond maturity in 2032. Assuming multi-year sales tax revenue declines of 10%, 8% and 2% followed by 1% growth thereafter (Fitch Stress Scenario), the bond term would run through 2023, a three-year extension from the no-growth scenario. The district also covers certain operating costs including project, maintenance and administrative costs that somewhat reduce excess revenues.

A weak additional bonds test and the allowance of subordinate debt raise the potential risk of additional leverage. Such leveraging could significantly extend final maturity although no additional debt is currently planned.

I-470 & 350 TDD, MO

The 87-acre transportation development district is located in the city of Lee's Summit, approximately 22 miles southeast of downtown Kansas City, Missouri (general obligation 'AA', Outlook Stable by Fitch). The district is comprised solely of SummitWoods Crossing Shopping Center (the center), which is anchored by Target Corp., Lowe's Home Improvement, and Best Buy Co.. The center is occupied by approximately 40 retailers, most of which lease their sites. The district is 100% occupied.

Sales tax collections have exhibited an uneven trend over the past six years. Collections increased by nearly 16% in 2012, then declined by 10% in 2013, followed by healthy 7.6% growth in 2014. Twelve-month collections through June 30, 2015 are up only 0.1% over 2014 receipts. However, coverage of debt service is robust at 1.8x in fiscal 2014. The substantial coverage has enabled a rapid pay-down of debt as excess revenues are used to prepay bond principal. Bond repayment can tolerate considerable stress. Under Fitch's stress scenario, the bonds will be fully paid by 2020, the same year as with a no-growth scenario.

WYANDOTTE/KANSAS CITY, KS

Village West was created in 1999 on a 400-acre tract of land located at the intersection of I-70 and I-435 about 15 miles west of downtown Kansas City. Development within Village West began in 2001, and currently all but approximately ten acres is developed. Village West is anchored by Nebraska Furniture Mart (NFM), Cabela's, and Great Wolf Lodge (GWL). In addition to the anchor stores, there are 68 retail stores, 28 restaurants and eateries, five hotels with 445 total rooms, a 14-screen movie theater, a major league soccer stadium, and a minor league baseball stadium.

Pledged sales and hotel tax revenues demonstrated strong growth coming out of the recession, increasing over 14% annually in 2011 and 2012, leveling off in 2013 and declining by 2% in 2014. Eleven month year-to-date collections for 2015 are up 5.4% year over year, bolstered in part by an increase in the state sales tax rate. The previous high rate of growth of pledged revenues has enabled extensive prepayment of the series 2010B bonds to the point that final retirement under almost any circumstances is projected for June 1, 2016.