Press Release|Public Finance

KBRA Affirms AAA Rating for Cook County, IL Sales Tax Revenue Bonds; Outlook is Stable

25 Jul 2023   |   New York


KBRA affirms the long-term rating of AAA with a Stable Outlook for the Cook County, IL Sales Tax Revenue Bonds.

Key Credit Considerations

The rating was affirmed because of the following key credit considerations:

Credit Positives

  • Pledged Revenues, consisting of home rule sales taxes, provide robust debt service coverage.
  • Strong bondholder protections, highlighted by a conservative non-impairment covenant (1.35x) and ABT (2.5x).
  • Deep and diverse economic base underpinning the revenue pledge, with no concentration.

Credit Challenges

  • Sales tax revenues, which encompass home rule sales taxes, are economically sensitive.
  • The possibility, albeit remote, that the State makes statutory changes to reduce the home rule sales tax rate.

Rating Sensitivities

For Upgrade

  • Not applicable at AAA rating level.

For Downgrade

  • While not expected, a prolonged and deep economic downturn that results in a severe long-term reduction in Pledged Revenues and/or a substantial increase in sales tax revenue debt.
  • Action by the State or County to reduce home rule sales tax rate or limit revenue collections.

To access rating and relevant documents, click here.


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