Cook dinner County, Illinois, plans to go to market Oct. 1 with $150 million of gross sales tax income bonds. The deal comes on the heels of a Moody’s Scores improve to Aa3 from A1 on Thursday.
The pricing date is agency, barring important market volatility, Deputy CFO Dean Constantinou stated by e mail.
Moody’s cited “a multi-year observe file of improved pension funding and rising reserves, together with one other seemingly surplus in fiscal 2025.”
The score company additionally famous the county’s important income flexibility; demonstrated observe file of making new recurring income sources and reducing expenditures; and an accessible fund stability ratio that may seemingly keep above 25% by means of fiscal 2027.
The improve impacts the county’s issuer and basic obligation score. The score outlook, beforehand optimistic, is steady after the improve.
“The county’s leverage ratio will seemingly stay barely above friends due to its excessive pension leverage regardless of its improved pension contribution practices,” Moody’s stated.
“We’re extremely happy with Moody’s determination to improve Cook dinner County’s bond score,” Cook dinner County Board President Toni Preckwinkle stated in an announcement. “That is one other notable recognition of our work creating long-term monetary stability for our residents.”
The Sequence 2025 bonds are rated AAA with a steady outlook by KBRA, which stated in a press launch that its score displays the bonds’ pledged revenues, consisting of dwelling rule gross sales taxes, which offer strong debt service protection.
Fitch Scores affirmed Cook dinner County’s basic obligation and gross sales tax income bonds at AA in July. The outlook is optimistic.
The tax-exempt, mounted fee Sequence 2025 bonds will refund excellent Sequence 2014D and Sequence 2018 basic obligation bonds, finance the development or restore of county amenities, fund a portion of the curiosity on the Sequence 2025 bonds and pay prices of issuance, in accordance with an investor presentation shared with The Bond Purchaser.
Cook dinner County CFO Tanya Anthony stated in an announcement that receiving a number of upgrades regardless of quite a few monetary challenges “is an actual testomony to the nice work of our entire finance group and management of President Preckwinkle.”
Constantinou stated the county might be trying to approve its capital funds in November, and the freed-up capability on its revolving line of credit score will assist finance the event of present amenities and initiatives addressing deferred upkeep.
The timing of this transaction stemmed partly from the county’s “distinctive financing methodology” set forth within the indentures of the 2014D and 2018 GO bonds, he stated.
“Beneath this settlement, we maintain a $175 million line of credit score and as capital bills are incurred by the county we draw down from the LOC to repay ourselves for these prices,” he stated. “Yearly, we then challenge new bonds to refill the road of credit score.”
Selections concerning the professional forma debt service construction of the bonds took into consideration the numerous ranges of legacy GO debt the county has been working by means of during the last 10 years, which actually begins to taper off on the finish of this decade, Constantinou stated.
“The county has applied a coverage requiring us to maintain whole debt service development to only 2% per yr,” he added. “These are the 2 essential elements for why you see debt service funds within the professional forma stage out within the subsequent decade.
“For this transaction, we have now benefited from an extended weighted common financial life than in earlier transactions, due partly to the current improvement of the county’s Infrastructure and Gear Fund, a pay-go capital fund, that permits us to make use of accessible fund balances from prior years to finance capital bills with a helpful life of 5 years or much less.”
County officers hope that as rates of interest decrease, they may have the ability to refund the debt service within the out years by making the most of the yield curve, he stated.
Principal funds are unfold out over the lifetime of the bonds, with the best principal funds due in 2046, 2047, 2048 and 2049.
Co-senior managers on the deal are Ramirez & Co. and Mesirow. The co-financial advisors on the deal are Columbia Capital Administration and RSI Group.
