KBRA Assigns AA- Rating to Metropolitan Pier and Exposition Authority McCormick Place Expansion Project Refunding Bonds Series 2024A and Series 2024B; Affirms Rating for Parity Bonds
June 26 2024 - 6:06PM
Business Wire
KBRA assigns a long-term rating of AA- to the Metropolitan Pier
and Exposition Authority McCormick Place Expansion Project
Refunding Bonds, Series 2024A and McCormick Place Expansion Project
Refunding Bonds, Series 2024B. KBRA additionally affirms the
long-term rating of AA- for outstanding McCormick Place Expansion
Project Bonds. The Outlook is Stable.
Key Credit Considerations
The rating actions reflect the following key credit
considerations:
Credit Positives
- State sales tax revenue support for bond repayment offsets
cyclical vulnerability of Authority tax revenues; bond security
features strong State non-impairment language.
- Expansive state-wide sales tax base provides extraordinary
coverage of more than 25x maximum permissible debt service.
- State appropriation actions in support of MPEA underscore the
importance of McCormick Place to regional and state economy.
Credit Challenges
- Bonds are secured by restaurant, hotel, rental car, and sales
taxes, which prior to rebounding had been adversely affected by
COVID-19 related restrictions.
- Determination to match Authority tax revenues with annual debt
service requirements, and minimize application of State sales tax
revenues, may necessitate continued debt restructuring.
- Vulnerability of State appropriation dependent payment
mechanism underscored by absence of timely action in 2015.
Rating Sensitivities
For Upgrade
- Authority tax revenues increase sharply and provide coverage of
debt service requirements, obviating the need for debt
restructuring.
For Downgrade
- State leverages Build Illinois Bond debt levels to the maximum
permitted level in combination with a significant economic downturn
that results in a sharp reduction in available State sales tax
revenues for MPEA Bond debt service.
To access rating and relevant documents, click here.
Methodologies
- Public Finance: U.S. Special Tax Revenue Bond Rating
Methodology
- Public Finance: U.S. State Annual Appropriation Obligation
Rating Methodology
- ESG Global Rating Methodology
Disclosures
A description of all substantially material sources that were
used to prepare the credit rating and information on the
methodology(ies) (inclusive of any material models and sensitivity
analyses of the relevant key rating assumptions, as applicable)
used in determining the credit rating is available in the
Information Disclosure Form(s) located here.
Information on the meaning of each rating category can be
located here.
Further disclosures relating to this rating action are available
in the Information Disclosure Form(s) referenced above. Additional
information regarding KBRA policies, methodologies, rating scales
and disclosures are available at www.kbra.com.
About KBRA
Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit
rating agency registered with the U.S. Securities and Exchange
Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is
registered as a CRA with the European Securities and Markets
Authority. Kroll Bond Rating Agency UK Limited is registered as a
CRA with the UK Financial Conduct Authority. In addition, KBRA is
designated as a designated rating organization by the Ontario
Securities Commission for issuers of asset-backed securities to
file a short form prospectus or shelf prospectus. KBRA is also
recognized by the National Association of Insurance Commissioners
as a Credit Rating Provider.
Doc ID: 1004901
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Analytical Contacts
Harvey Zachem, Managing Director (Lead Analyst) +1 646-731-2385
harvey.zachem@kbra.com
Peter Scherer, Senior Director +1 646-731-2325
peter.scherer@kbra.com
Karen Daly, Senior Managing Director (Rating Committee Chair) +1
646-731-2347 karen.daly@kbra.com
Business Development Contacts
William Baneky, Managing Director +1 646-731-2409
william.baneky@kbra.com
James Kissane, Senior Director +1 646-731-2380
james.kissane@kbra.com