KBRA Assigns AA- Rating to Metropolitan Pier and Exposition Authority, IL McCormick Place Project Bonds
11 Sep 2026 | New York
KBRA assigns a long-term rating of AA- to the Metropolitan Pier and Exposition Authority (Illinois) (the Authority) McCormick Place Expansion Project Refunding Bonds, Series 2026A. Concurrently KBRA affirms the AA- rating on the Authority's outstanding McCormick Place Expansion Project Bonds. The Outlook is Stable.
Proceeds of the Series 2026A Bonds will refinance certain outstanding bonds of the Authority; fund capitalized interest on the Series 2026A bonds and pay the costs of issuance.
Expansion Project Bonds (the Bonds), including the Series 2026A Bonds, are secured by a pledge of Authority Tax revenues, which consist of a 1% food and beverage tax levied in the Chicago central business area and at Chicago-Midway and Chicago-O’Hare International Airports, a 2.5% hotel tax collected city-wide, a 6% rental car tax collected throughout Cook County, and airport ground transportation departure taxes levied at the two airports. These revenue sources recorded substantial volatility due to the COVID-19 pandemic but have exceeded prior highs since Fiscal Year (FY) 2023 (FY end June 30).
The Bonds are additionally secured by a maximum of $300 million of State sales tax receipts (rises in steps to $450 million in 2036), subject to a prior lien granted the State’s outstanding Build Illinois Bonds, which may be utilized to offset deficiencies in Authority tax revenue.
Key Credit Considerations
Credit Positives
- Sound, diverse stream of Authority taxes that approximates annual debt service bolstered by a pledge of expansive, steady state-wide sales tax revenue that raises annual debt coverage to more than 2.5x.
- McCormick Place, the largest convention center in North America, holds a leading position in the national convention and trade show market.
- Bond security features strong State non-impairment language and State appropriation actions in support of MPEA underscore the importance of McCormick Place to regional and state economy.
Credit Challenges
- Authority tax revenues are cyclically sensitive and have occasionally fallen below annual debt service requirements, resulting in draws on State sales tax support.
- Ascending debt service schedule prompts a need for periodic refundings to match annual debt service requirements with Authority tax revenues and minimize draws on pledged State sales tax revenues.
- Vulnerability of State appropriation dependent payment mechanism underscored by absence of timely action in 2015.
Rating Sensitivities
For Upgrade
- Growth in Authority tax revenues to a level sufficient to provide ample coverage of debt service requirements, obviating the need for either draws on the State sales tax or periodic debt restructuring.
For Downgrade
- Failure of State to appropriate funds for payment of debt service.
- Underperformance of Authority taxes resulting in an increased reliance on state resources.
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