Rating of Aaa, Lake County’s 90M bonds: Moody’s

At least some good things come out of the ability to raise property taxes at will: Moody’s has assigned Lake County an Aaa rating for $90 million in bonds for sale 6/12/2015.  Their reason for the great rating?  To Quote Moody’s assessment “The county’s outstanding general obligation unlimited tax debt is ultimately secured by a property tax pledge that benefits from a dedicated property tax levy which is unlimited as to rate or amount.”  Isn’t that wonderful?Moody's

Moody’s assigns Aaa to Lake County, IL’s $90M GO Bonds (Alt Rev.), Ser. 2015A

Global Credit Research – 29 May 2015    Aaa applies to $193.5M of GO debt

New York, May 29, 2015 —  Moody’s Rating

Issue: General Obligation Bonds (Sales Tax Alternate Revenue Source), Series 2015A; Rating: Aaa; Sale Amount: $90,000,000; Expected Sale Date: 06/12/2015; Rating Description: General Obligation

Opinion

Moody’s Investors Service assigns a Aaa rating to Lake County, IL’s $90.0 million General Obligation Bonds (Sales Tax Alternate Revenue Source), Series 2015A. Moody’s maintains the Aaa rating on the county’s outstanding general obligation (GO) debt. Post-sale, the county will have $193.5 million of GO debt outstanding.

SUMMARY RATING RATIONALE

The Aaa rating incorporates the county’s developed economic base with strong wealth levels; well-managed financial operations with healthy reserves that provide substantial flexibility despite planned reductions; and manageable debt burden with no immediate future borrowing plans.

OUTLOOK

Outlooks are usually not assigned to local government credits with this amount of debt outstanding.

WHAT COULD MAKE THE RATING GO DOWN

-Erosion of the county’s tax base to levels below similarly rated entities

-Substantial deterioration in Operating Fund reserves and liquidity

OBLIGOR PROFILE

Lake County encompasses approximately 447 square miles and is located in northeastern Illinois (A3 negative). The county is the third most populous county in the State of Illinois and had a population of 703,462 during the 2010 census.

LEGAL SECURITY

The county’s outstanding general obligation unlimited tax debt is ultimately secured by a property tax pledge that benefits from a dedicated property tax levy which is unlimited as to rate or amount.

USE OF PROCEEDS

Proceeds of the current offering will partially finance the acquisition, construction and equipping of a new courts building, the repair, rehabilitation, remodeling and equipping of the existing courts buildings and facilities, construction of a connecting tunnel between the new court building and the existing courthouse, and the construction and equipping of an addition to the existing juvenile justice center

PRINCIPAL METHODOLOGY

The principal methodology used in this rating was US Local Government General Obligation Debt published in January 2014. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody’s rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider’s credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody’s legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Mark G. Lazarus
Asst Vice President – Analyst
Public Finance Group
Moody’s Investors Service, Inc.
100 N Riverside Plaza
Suite 2220
Chicago, IL 60606
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Genevieve K Nolan
Vice President – Senior Analyst
Public Finance Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Releasing Office:
Moody’s Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Original Announcement: https://www.moodys.com/research/Moodys-assigns-Aaa-to-Lake-County-ILs-90M-GO-Bonds–PR_326661