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KBRA Assigns AA+ Rating to State of Illinois, Build Illinois Bonds (Sales Tax Revenue Bonds), Junior Obligation Series A, B, and C of December 2025; Affirms Parity Debt; Stable Outlook

14 Nov 2025   |   New York

Contacts

KBRA assigns a long-term rating of AA+ with a Stable Outlook to the State of Illinois (the "State"), Build Illinois Bonds (Sales Tax Revenue Bonds), Junior Obligation Series A, B, and C of December 2025 (the "Junior Bonds"). KBRA additionally affirms the long-term rating of AA+ with a Stable Outlook for the State's outstanding parity Build Illinois Bonds (Sales Tax Revenue Bonds) Junior Obligation.

Key Credit Considerations

The rating actions reflect the following key credit considerations:

Credit Positives

  • Security provisions are strong and include a priority lien on State sales tax revenues after payment of senior lien Build Illinois Bonds, a continuing appropriation requirement, and strong non-impairment language.
  • Junior Bonds’ additional bonds test (ABT) requires 10.2x coverage of maximum annual debt service on combined senior and junior lien debt outstanding, significantly limiting the potential to overleverage.
  • The statewide sales tax base is expansive and diverse, highlighted by combined debt service coverage of between 30.0x-46.0x over the past five fiscal years.

Credit Challenges

  • The Bonds are secured by sales tax revenues, which can at times be adversely affected by economic factors, although the strong coverage levels and highly restrictive ABT are important mitigants.

Rating Sensitivities

For Upgrade

  • Accelerated, sustained growth in pledged revenue collections, coupled with manageable debt levels.

For Downgrade

  • While unlikely, issuance of senior and junior lien Build Illinois Bonds (Sales Tax Revenue Bonds) up to their respective ABTs, coupled with a catastrophic economic downturn that leads to a lasting, significant reduction in sales tax revenues.

To access ratings and relevant documents, click here.

Methodologies

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), one of the major credit rating agencies (CRA), is a full-service CRA 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 (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

Doc ID: 1012328