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KBRA Affirms BBB+ Rating for the Board of Education of the City of Chicago, IL Capital Improvement Tax Bonds

12 Mar 2026   |   New York

Contacts

KBRA affirms the long-term rating of BBB+ for the Board of Education of the City of Chicago, Illinois Dedicated Capital Improvement Tax Bonds. The Rating Outlook is Stable.

Key Credit Considerations

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

Credit Positives

  • Capital Improvement Tax (CIT) Bonds are secured by a statutory lien on property tax dedicated for capital projects which provides sound coverage of annual debt service bolstered by the presence of a Consolidated Debt Service Reserve Fund.
  • CIT property tax limited to amount, which adjusts annually based on the consumer price index, not as to rate, which is set based on changes in the assessed value to generate the levied amount of CIT taxes.
  • Property tax base is broad and diverse with history of strong current year and total collections.

Credit Challenges

  • Recent history of delayed County tax collections due to property tax appeals and issues with a new computer system, are not expected to affect CIT debt service payments.
  • Significant burden placed on the property tax base by the combined operating, debt service, and pension levies of the Board and overlapping jurisdictions
  • Lack of definitive precedent in the treatment of special revenues in a distressed or bankruptcy scenario, which creates uncertainty regarding the position of the CIT Bonds within the Board’s complex debt stack.

Rating Sensitivities

For Upgrade:

  • Improved credit profile of the Board.
  • Increased margin between CIT bond levy and the maximum CIT levy creating flexibility to address potential declines in property tax collections.

For Downgrade:

  • Sustained decline in tax collections resulting in coverage below the DSCR covenant of 1.10x.
  • Draws on Consolidated Debt Service Reserve Fund without replenishment.
  • Further deterioration in the Board’s credit profile which remains fiscally challenged.

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: 1013931