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.


* Run away! Run away!
* Rauner complains that Quinn "stole" his accomplishment
* Two colleagues, two different takes on a reporter's resignation
* SUBSCRIBERS ONLY - Fundraising updates
* Rauner with 2-1 money lead over Quinn
* Waukegan school strike finally ends
* Today's must-read
* SUBSCRIBERS ONLY - Supplement to today’s edition: Crosstabs, cable TV buys, mail, etc.
* SUBSCRIBERS ONLY - Today's edition of Capitol Fax (use all CAPS in password)
* Good morning!
* 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

          
        * Can HERE Maps compete with the likes of Google?
        * Boulder Dash 30th Anniversary game for Android introduced
        * Nexus 6 Play Store stock shortages a consequence of carrier involvement?
        * Nexus 6 sells out in minutes, DROID Turbo goes ballistic, Microsoft Band sneaks out early | Pocketnow Weekly 120
        * Flipboard 3.0 aims for personalization with 30,000 topics
        * Apple CEO Tim Cook speaks out: ‘I’m proud to be gay’
        * Lenovo completes Motorola acquisition

        * T-Mobile has the least expensive monthly plan for Samsung’s 3G-equipped Gear S smartwatch
        * Google Play Books’ new reading mode lets you browse and skim nonfiction ebooks faster
        * This App Uses Your Neighbors’ Phones to Find Your Lost Pet
        * Five Fear Mongering Myths That Are True (But Overblown)
        * Task-master app Any.do goes premium with collaboration features
        * Identify and Avoid "Ah, Screw It" Moments to Form Better Habits
        * What’s wrong with automatically scanning Twitter for suicidal tweets?

        * The offseason begins with a new Chicago manager and old arguments
        * World Series Game 7: Notes and discussion
        * Guillen, White Sox look back on '05 championship
        * White Sox offseason plan roundup: Designated hitter
        * Fall Stars Game filled to brim with talent
        * World Series Game 6: Notes and discussion
        * Thomas proud with Big Hurt Brewhouse set to open


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

        Archives
        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


        * Halloween! Visit Logan Square's Dr. Frankenstein..
        * State retirees' coverage finally a local option.....
        * Wayne's Words: Campaign season can't end too soon..
        * DCCC Head, Rep. Steve Israel: ‘We’re In Trench .....
        * Waukegan schools, teachers reach tentative deal..
        * Does Former Tampa Bay Rays Manager Joe Maddon H.....
        * Cronus Fertilizers Plans To Build $1.4 Billion .....
        * Haven't voted yet? Here's all you need to know..
        * Cronus Fertilizers to build CSX-served plant in.....


        * Inmate ordered freed in landmark Illinois case
        * Dedication set at memorial of 1994 plane crash
        * Illinois' US Senate candidates spar in last debate
        * Candidates spar in final debate US Senate debate
        * Chicago mayoral candidate says he can raise $3M
        * Judge denies ex-representative new bribery trial
        * Chicago pol investigated in prizes-for-votes plan
        * Restructuring to close 9 Chicago Catholic schools
        * Grocery chain sues Clorox for price discrimination
        * Lawyer: Rap reference in complaint misleading

        * Judge denies ex-representative new bribery trial
        * Libertarian candidate for governor gets union cash
        * Illinois Supreme Court justice faces opposition
        * Quinn pledges $1.3M for 3-state intermodal port
        * Vallas: Rauner ‘doesn’t get it’ on minimum wage
        * Acquiring first seeds a dilemma for medical marijuana growers
        * Election 2014: Background on the big races, endorsements, videos
        * Medical pot dilemma: Where to get the first seeds?
        * Vallas: Rauner “doesn’t get it” on minimum wage
        * Ex-state lawmaker could change plea in child porn case

        * Apple CEO: 'I'm proud to be gay'
        * Is this the cheapest price yet for college textbooks?
        * 10 Things to Do
        * Classy in the classroom
        * Allstate profit more than doubles


        * Chicago bead merchant Ronnie Klein, whose Loop business drew stars, dead at 65
        * Chicago bead merchant Ronnie Klein, whose Loop business drew stars, dead at 65
        * Durbin, Oberweis square off for final time
        * Refund those unfair yellow-light tickets
        * Sad day  when  Catholic  schools  close
        * Let’s not oversell CTA terrorist screenings
        * Let’s not oveRsell CTA terrorist screenings
        * Tourism biz should be more transparent
        * Emanuel: ‘World is different now,’ defends CTA random bag checks
        * Schneider, Dold fighting for the Jewish vote in 10th District: Sweet


        * Lake County Jail guards indicted in inmate's death
        * Man charged in downtown convenience store robberies
        * Police shoot man in Back of the Yards
        * Waukegan school district, teachers announce tentative contract
        * Trauma center protesters target U. of C. capital campaign
        * U of C: No deal with nurses by Friday; union eyes strike vote
        * Teen shot in Marquette Park
        * Durbin touts record; Oberweis blasts 'political speak'
        * In video, mother tells how she wrapped newborn in plastic, put him in trash
        * Cops: Elgin man charged with murder in park stabbing


        * As Infrastructure Crumbles, Trillions Of Gallons Of Water Lost
        * Authorities: Springfield Woman's BAC Three Times The Legal Limit
        * 2014 Election Coverage: Citizens, here's your homework!
        * Aldermen skip chance to ask about city’s handling of police commander
        * Immigrant Rights Groups: Demand Oustrips Slots For Driver's Licenses
        * U-S Senate Candidates Differ On Ebola Response And More
        * Listen to State Week - October 24, 2014
        * A Look At Amazon's Move To Illinois
        * Bedrock 66: Charlie Parr Plays Springfield Friday
        * What's New With The Sangamon Valley Youth Symphony? Quite A Lot


        * Eugene Robinson: Ben Bradlee and the whole story
        * George Will: In Georgia, a capitalist struggles
        * Richard Dye and Richard Winkel Jr: Illinois’ fiscal situation is worse than you know or candidates will admit
        * Steve Herr: Benedictine in the administrative age
        * Quote of the Day: Thursday, Oct. 30
        * On Lincoln’s Side: A Just Pardon
        * Bernard Schoenburg: Bell accuses Scherer of ‘illegally’ taking tax break while he got same exemption
        * Judge denies ex-representative new bribery trial
        * Bill Edley: Will history repeat itself in the 17th?
        * Michael Gerson: A matter of ends


        * Daily Digest 10/30/14
        * Committee discusses the arts in downtown
        * Cross campaigns for balanced budget in B-N stop
        * "Ouija" Reveals Nothing New
        * Alumni: SIU is great; downtown is ho-hum
        * Take a break at Murphysboro's Smysor Plaza
        * Illini headed to Springfield?
        * Illini headed to Springfield
        * Daily business briefing: Stimulus ends, dollar strengthens
        * Part of Moline's 15th Street closed today


        * Apple CEO Tim Cook: ‘I'm proud to be gay'
        * Ebola: Danger in Sierra Leone, progress in Liberia
        * Viral video documents New York street harassment
        * Peshmerga troops start entering Syrian border town
        * Senate control could turn on 2 independents' moves

        * Patrick Cannon defense strategy rare but n...
        * Feds fine Jesse Jackson Jr.'s campaign com...
        * Ex-Congressman Jesse Jackson Jr. faces sen...
        * Representative Jan Schakowsky Sends Letter...
        * Rep. candidate pushes to uphold marriage b...
        * Reps. Schakowsky and Waxman Introduce Bill...
        * Statement by Representative Jan Schakowsky...
        * U.S. House Passes Resolution Condemning An...
        * FAA Rejects Call For New O'Hare Noise Stud...
        * Representatives Quigley, Duckworth, Schako...

        * Durbin, Oberweis discuss NFL, space travel......
        * Durbin, Oberweis discuss NFL, space travel......
        * DCCC Head, Rep. Steve Israel: ‘We’re In Tr......
        * DCCC Head, Rep. Steve Israel: ‘We’re In Tr......
        * Haven't voted yet? Here's all you need to ......

        * Senator Sharing Career Story At Triton...
        * Sen. Mark Kirk to talk with Triton College......
        * The “Democrats running from Obama” story i......
        * If Republicans Win the Senate, GOP Faction......

        * Liberal Congressmen to keynote NAACP banquet in Peoria
        * Chicago to host US-China agriculture and trade meeting
        * Kirkwood: A Lesbian Mayor’s Lavender Fatwa on Pastors
        * Where's Weyermuller? Oberweis vs Durbin Debate
        * Durbin and Oberweis close campaign on WTTW's Chicago Tonight
        * RNC says "Get Rid of Obamacare - Vote Republican" [video]
        * Durbin, Oberweis To Square Off At WTTW Candidate Forum Tonight
        * Tensions Flare At Waukegan School Board Meeting (UPDATED)
        * Chicago Housing Activists Call On Emanuel To Support 'Keep The Promise' Ordinance
        * Chicago Housing Initiative Protest


        * Quinn to celebrate Rauner’s UI Labs accomplishment
        * Another Democrat Runs Away From Pat Quinn
        * Quinn on buying votes with taxpayer money: “Is that a crime?”
        * Editorial: Ebola politics and health practices
        * Governor Pat Quinn Directs State Education Chief to Help Reach Resolution in Waukegan Local Teachers' Strike




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