- Associated Press - Wednesday, December 16, 2015

TOPEKA, Kan. (AP) - The Kansas Department of Transportation has issued a state record of $400 million in highway construction bonds to take advantage of the suspension of a state law limiting the agency’s debt burden.

Kansas transportation secretary Mike King also says favorable market forces warranted issuing the bonds.

The 2015 Kansas Legislature and Gov. Sam Brownback agreed to suspend for two years a provision forbidding the transportation department’s aggregate bond debt service to exceed 18 percent of the agency’s annual highway revenue.

The Topeka Capital-Journal (https://bit.ly/1O8uOuf ) reports that the bond transaction in early December and pushed borrowing in the 10-year, $7.8 million T-Works program to $1.2 billion. King says he would be comfortable increasing the bond obligations to $1.7 billion, but not higher.

“We get outside of that and I start to totally get out of my comfort zone,” King said.

King says department advisers recommended a large bond offering because the state’s cost to secure capital could rise unexpectedly.

“We got it right about 3 percent, which is fantastic pricing. We went out and we got a little bit more than I thought we’d get a year ago. The conditions were right to do it now,” King said.

Brownback is expected to ask legislators in January to endorse the withdrawal of at least $50 million from the department’s pat general government expenses. Lawmakers have already approved $278 million in transfers out of the transportation department for the current fiscal year.

The transportation official said he does not anticipate a bond issue in 2016.


Information from: The Topeka (Kan.) Capital-Journal, https://www.cjonline.com

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