Press Release|Public Finance
KBRA Assigns AA- to Metropolitan Pier and Exposition Authority (Illinois) McCormick Place Expansion Project Refunding Bonds, Series 2023A and 2023B; Affirms Parity Debt; Outlook Remains Stable
20 Sep 2023 | New York
KBRA assigns a long-term rating of AA- to the Metropolitan Pier and Exposition Authority (MPEA) McCormick Place Expansion Project Refunding Bonds, Series 2023A and McCormick Place Expansion Project Refunding Bonds, Series 2023B. KBRA additionally affirms the AA- rating for parity debt. The outlook remains 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.