SUBSCRIBE to Capitol Fax      Advertise Here      Mobile Version     Exclusive Subscriber Content     Updated Posts    Contact
CapitolFax.com
To subscribe to Capitol Fax, click here.
Chicago debt rating lowered because of poor state credit

Friday, Mar 15, 2013

* Illinois’ bad credit rating is now hurting Chicago’s rating. Moody’s just lowered the rating on the city’s motor fuel tax borrowing and assigned it a negative outlook

“Debt service on the motor fuel tax bonds of the city of Chicago is secured by a senor lien pledge of a portion of the city’s allocation of state motor fuel tax revenues,” Moody’s said in a statement. “With legislative approval, the state has the authority to reduce pledged revenues by reducing . . . motor fuel tax revenues to the city.”

The “risk of non-appropriation” of the state money to Chicago exists as the state struggles to raise cash for its own needs, Moody’s added, implying that the risk that the state will keep the money rather than pass it along to Chicago actually is growing.

Moody’s also cited the state’s declining credit rating and reduced revenues from per-gallon state taxes on gasoline, which have dropped as the price of gas has risen. […]

“Assignment of the negative outlook (on the motor fuel debt) is in keeping with the negative outlook assigned to the state’s general obligation debt,” Moody’s concluded.

Oof.

- Posted by Rich Miller        


10 Comments
  1. - Kasich Walker, Jr. - Friday, Mar 15, 13 @ 1:46 pm:

    “With legislative approval, the state has the authority to reduce pledged revenues by reducing . . . motor fuel tax revenues to the city.”

    Tough to picture a scenario in which that would happen.

    If the GOP were to win both houses and the Governorship, it would be due to an unforeseen ability to get support out of the city.


  2. - wordslinger - Friday, Mar 15, 13 @ 1:47 pm:

    Yeah, the hits keep coming.

    There was something out of whack with that motor fuel tax bond rating. At Aa3, it was two steps higher than the state’s GO bond rating.

    That doesn’t make any sense if the bonds are secured by annual appropriation of motor fuel tax revenues.

    GO bonds have very strict statutory protection; they get paid first. There’s no way bonds subject to annual appropriation should be rated higher.

    Seems like a correction.


  3. - The Captain - Friday, Mar 15, 13 @ 2:02 pm:

    “Please send maintenance up to the 5th floor to replace the Mayor’s phone, it just melted.”


  4. - Cook County Commoner - Friday, Mar 15, 13 @ 2:19 pm:

    Looks like Moody’s is sending a message to Springfield via Chicago. Does Moody’s rationale extend to other bond issues by local government pledging state money? I don’t follow munis and wonder if such pledges are common.


  5. - wordslinger - Friday, Mar 15, 13 @ 2:25 pm:

    CCC, the state backstops Navy Pier and McCormick Place bonds, plus, I believe, some downstate convention centers, with the state sales tax, but that’s statutory as well.

    That’s what confused me about these motor fuel tax bonds. I find it very strange that they had such a high rating, Aa3, if debt service was tied to annual appropriations that could be cut off.


  6. - Pot calling kettle - Friday, Mar 15, 13 @ 2:50 pm:

    This is all about Wall Street making more money. If the state (and city) won’t put more money into Wall Street through the pension funds, they’ll get it through higher rates on bonds.


  7. - Boone Logan Square - Friday, Mar 15, 13 @ 2:53 pm:

    “Pat, it’s Rahm. What happened to your brother this week’s gonna look like a kiss on the cheek compared to what you’re gonna get if this isn’t resolved pronto!”


  8. - Really? - Friday, Mar 15, 13 @ 3:06 pm:

    @ Pot

    ====This is all about Wall Street making more money. If the state (and city) won’t put more money into Wall Street through the pension funds, they’ll get it through higher rates on bonds. ====

    Thats not how that works. Sorry.


  9. - steve schnorf - Friday, Mar 15, 13 @ 3:15 pm:

    word, my guess is its probably about the numeric coverage. I haven’t checked lately, but the state’s Build Illinois bonds were always rated higher than the GO bond-pure silliness.


  10. - wordslinger - Friday, Mar 15, 13 @ 3:32 pm:

    Schnorf, I suspect your right, but it’s pure silliness if it’s subject to annual appropriation.

    If I recall on Build Illinois, it was a coverage issue as well — X in dedicated revenue streams covering X in bonds.

    It was still silly to be rated higher than a GO. I suspect back in the day it was something of a “new customer” discount for bringing a new product — and the fees involved — to the market.


Sorry, comments for this post are now closed.


* A missed revenue opportunity
* Caption contest!
* Union-sponsored poll shows support for labor agenda
* A good way and a bad way
* The next target
* Question of the day
* Sam Zell quadruples wife's contribution
* SUBSCRIBERS ONLY - Fundraiser/event list (Use last week's password)
* Cleaning up part of the CoD mess
* Today's number: $42,000
* Anti Israeli boycott bill moves to the House
* Out of state biz journalists peeved at Rauner
* *** UPDATED x1 *** Your daily "right to work" roundup
* Redistricting effort to reboot this week
* Having it both ways
* Why isn't Speaker Madigan voting on bills?
* Yesterday's blog posts

Support CapitolFax.com
Visit our advertisers...

...............

...............

...............

...............

...............

...............

...............

...............


Search This Blog...

Search the 98th General Assembly By Bill Number
(example: HB0001)

Search the 98th General Assembly By Keyword

          
        * Facebook now lets you do video calls via Messenger
        * Google Keep for Android Wear allows note-taking without typing
        * Bodyprint technology turns touchscreen into a biometric scanner
        * Samsung Galaxy S6 Edge adjudged the best camera on a smartphone in the industry
        * Nextear may be the “smartest” wireless earphones in the market
        * Apple quarter results spell 61M iPhones sold, Macs on a rise, iPads on decline
        * The ultimate guide to how and where to use Apple Pay

        * Apple Watch App Store Now Boasts Over 3,500 Titles
        * SwiftKey’s Clarity Keyboard Wants To Be Smarter Than Its Predecessors
        * OK Google Feature Oddly Missing From The Samsung Galaxy S6
        * Best Buy Starts Accepting Apple Pay On App, In-Store Support Later This Year
        * Google Plays Nice With European Publishers, Dumps $163 Million Into Innovation Fund
        * MyFitnessPal Launched On The Apple Watch
        * Diablo 3 Player Hits Level 70 In A Little Over A Minute

        * White Sox agree with decision to postpone O's opener
        * Protests force postponement of O's-White Sox on Monday
        * Protests force postponement of O's-White Sox on Monday
        * White Sox fan's photo, tweet of Gordon's catch goes viral
        * Orioles' game vs. White Sox postponed
        * Stuck Together, Torn Apart - A Baltimore Orioles preview
        * Podcast: White Sox Fighting Back

        ...............


        Main Menu
        Home
        Illinois
        YouTube
        Pundit rankings
        Obama
        Subscriber Content
        Durbin
        Burris
        Blagojevich Trial
        Advertising
        Updated Posts
        Polls

        Archives
        April 2015
        March 2015
        February 2015
        January 2015
        December 2014
        November 2014
        October 2014
        September 2014
        August 2014
        July 2014
        June 2014
        May 2014
        April 2014
        March 2014
        February 2014
        January 2014
        December 2013
        November 2013
        October 2013
        September 2013
        August 2013
        July 2013
        June 2013
        May 2013
        April 2013
        March 2013
        February 2013
        January 2013
        December 2012
        November 2012
        October 2012
        September 2012
        August 2012
        July 2012
        June 2012
        May 2012
        April 2012
        March 2012
        February 2012
        January 2012
        December 2011
        November 2011
        October 2011
        September 2011
        August 2011
        July 2011
        June 2011
        May 2011
        April 2011
        March 2011
        February 2011
        January 2011
        December 2010
        November 2010
        October 2010
        September 2010
        August 2010
        July 2010
        June 2010
        May 2010
        April 2010
        March 2010
        February 2010
        January 2010
        December 2009
        November 2009
        October 2009
        September 2009
        August 2009
        July 2009
        June 2009
        May 2009
        April 2009
        March 2009
        February 2009
        January 2009
        December 2008
        November 2008
        October 2008
        September 2008
        August 2008
        July 2008
        June 2008
        May 2008
        April 2008
        March 2008
        February 2008
        January 2008
        December 2007
        November 2007
        October 2007
        September 2007
        August 2007
        July 2007
        June 2007
        May 2007
        April 2007
        March 2007
        February 2007
        January 2007
        December 2006
        November 2006
        October 2006
        September 2006
        August 2006
        July 2006
        June 2006
        May 2006
        April 2006
        March 2006
        February 2006
        January 2006
        December 2005
        April 2005
        March 2005
        February 2005
        January 2005
        December 2004
        November 2004
        October 2004

        Blog*Spot Archives
        November 2005
        October 2005
        September 2005
        August 2005
        July 2005
        June 2005
        May 2005

        Syndication

        RSS Feed 2.0
        Comments RSS 2.0
        WordPress

        Loading


        * Zell gives $4 million to Rauner's pro-business PAC..
        * Lt. Gov. guest speaker at Republican event..
        * Brown: It takes big bucks to sell message that .....
        * Out of state biz journalists peeved at Rauner..
        * Suburban mayors launch campaign to fight state .....
        * Want to talk roads? IDOT's 'listening' at speci.....
        * Billionaire Sam Zell gives $4M to Rauner's poli.....
        * State senator visits ARC of the Quad Cities..


        * US court upholds Chicago suburb's assault weapons ban
        * Report: Internships given based on clout at Illinois agency
        * Chicago men return from Nepal after experiencing earthquake
        * Trial begins in 2010 slayings of Chicago officer, official
        * Appeal likely after court upholds assault weapons ban
        * US court upholds Chicago suburb's assault weapons ban
        * Man shot by housing authority police office had been barred
        * University of Chicago Medical Center nurses set to strike
        * Suburban Chicago mayors protest proposed budget cuts
        * WIU football player to be bone marrow donor for infant

        * Local doctors, adoptive family dealing with a disaster close to home
        * Frerichs to scale back internship program after audit of treasurer's office
        * Suburban Chicago mayors protest proposed budget cuts
        * Illinois budget cuts to affect students, sickle cell center
        * Billionaire Sam Zell gives $4M to Rauner's political fund
        * Illinois GOP targets political hiring; Democrats wary
        * Crib bumper bills bump heads in General Assembly
        * New state school superintendent says funding fix could take years
        * Statehouse Insider: Rauner's story of unions stifling innovation "sounds like pure fiction," union says
        * New schools chief says funding fix could take years

        * University of Chicago Medical Center nurses set to strike
        * Obscure federal agency with a lot of dough comes calling in Chicago
        * Boeing CEO: Losing Ex-Im Bank could cost U.S. manufacturing jobs
        * Paul Johnson, bank builder and bon vivant, dies at 83
        * Zell gives $4 million to Rauner's pro-business PAC


          * Lure of $20,000 reward led to charges in cop killing, defense says
          * Community Counseling Centers of Chicago asks for $1 million to halt closure
          * Treasurer report finds fault in internship, scholarship programs
          * Appeals court upholds Highland Park assault weapons ban
          * Girl fighting cancer, sister to become honorary Chicago police officers
          * Chicago climber OK after Mt. Everest avalanche, Nepal earthquake
          * McCarthy concerned that charges against cop could cause officers to hesitate
          * Preckwinkle tries to make Berrios nepotism fine stick
          * Driver, 77, rescued after plunging into pond
          * Wounded dog survives shooting, police investigate owner's death


          * Red light camera ban passes House
          * Method factory opens in Pullman
          * More than 1,000 local nurses plan a strike
          * Changes in taxi industry leave cab owners underwater
          * More than 3,700 dead in Nepal as earthquake's toll rises
          * Trial to begin in 2010 slayings of Chicago officer, official
          * Illinois prisons chief says union contracts causing problems
          * Sheriff Dart to investigate unlicensed rehab centers
          * Large provider of Chicago mental health services, C4, is closing
          * After detective’s acquittal in fatal shooting, prosecutors face criticism


          * Local doctors, adoptive family dealing with a disaster close to home
          * Frerichs to scale back internship program after audit of treasurer's office
          * Marc Levine: Rauner has the solution for Illinois' pension problem
          * Suburban Chicago mayors protest proposed budget cuts
          * Illinois budget cuts to affect students, sickle cell center
          * Billionaire Sam Zell gives $4M to Rauner's political fund
          * Illinois GOP targets political hiring; Democrats wary
          * Crib bumper bills bump heads in General Assembly
          * New state school superintendent says funding fix could take years
          * Bernard Schoenburg: Downstate representation gone from Illinois Commerce Commission


          * SIU professor arrested after alleged battery of student
          * Iowa man dies after falling from Damiansville water tower
          * Finke named Central coach
          * Pontiac prison readies for mental health overhaul
          * Chancellor finalist Randhawa: SIU has 'tremendous potential'
          * Dress for Success hosts Recycle the Runway
          * New I-DOT chief: money not there yet for interchange project
          * HS Softball: Danville vs Champaign Centennial
          * Marathon officials already planning if weather turns next year, too
          * Budget cuts to affect students, sickle cell center


          * Lindenhurst park chief retiring after 23 years
          * White Sox game in Baltimore postponed
          * Riot, looting prompt state of emergency, curfew in Baltimore
          * Elgin Habitat ReStore no longer accepting electronics for recycling
          * Former Kane County Board member, veterans' advocate dies

          * Milbank: Using Jesus to curtail reproducti...
          * Instapundit shares shocking claim of sexua...
          * Ticket Sales Closing for Congressional Pra...
          * What’s happening
          * Congresswoman Cheri Bustos payed a visit t...
          * New member of ways and means appointed; ta...
          * Milbank: A House Republican steps to the p...
          * LIVE: Biden speaks on supporting survivors
          * Bost is impressed by McKendree intern
          * The Black Sorority's Political Influence

          * For-Profit College Closure Could Cost Taxp......
          * John McCain: Saboteur of conservative inte......
          * Murray, mom in tennis shoes in ’92, stands......
          * Capitol Hill Buzz: Dems push higher pay fo......
          * Durbin pushes for FDA e-cigarette regulation...

          * Senator Kirk, 9/11 First Responders from I......
          * Sen. Kirk Pushes For Funds To Help Ground ......

          * Illinois Legislature Passes Youth Sentencing Reform Legislation
          * Baltimore Erupts In Violent Protests, Looting Over Freddie Gray Death
          * Rapid Rise In Super PACs Dominated By Single Donors
          * The Beachwood Radio Hour #54: Reading The Rekia Boyd Case
          * Trauma Center Activists Hold Overnight Vigil Outside U Of C President's Home (VIDEO)
          * As sewer video bill dies, your call against property lien bill is needed, too!
          * “The Driver’s Side” – News From The Motorist’s Perspective
          * State Capitol Report notes more potential fund sweeps
          * Illinois Hispanic GOP group holds convention
          * Suburban mayors meet with manufacturers to discuss common concerns


          * Illinois EPA and Boy Scouts of America Partner for Annual 20-Mile Lincoln Trail Hike - Lincoln Pilgrimage honors Abraham Lincoln’s 20-mile trek; Scouts pick-up litter along the scenic trail
          * IDPH Moves to Eliminate Meningococcal Meningitis - New Vaccination Requirements for Adolescents
          * YOUR ACTIONS MATTER! kicks off statewide as preparations begin for new server training law
          * Emergency Management Officials Launch Weather Alert Radio Contest - ‘Weather Alert Radios Save Lives’ contest promotes awareness; 100 radios to be awarded
          * IDOT Launches Statewide Listening Tour to Discuss Illinois Infrastructure Needs, Priorities





              Hosted by MCS SUBSCRIBE to Capitol Fax Advertise Here Mobile Version Contact Rich Miller