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KBRA Assigns AA+ Rating to State of Illinois Build Illinois Bonds (Sales Tax Revenue Bonds), Junior Obligation Series A, B, and C of February 2024; Affirms Parity Debt; Outlook is Stable

KBRA assigns a long-term rating of AA+ with a Stable Outlook to the State of Illinois Build Illinois Bonds (Sales Tax Revenue Bonds), Junior Obligation Series A, B, and C of February 2024. KBRA additionally affirms the long-term rating of AA+ with a Stable Outlook for the State of Illinois' parity Build Illinois Bonds (Sales Tax Revenue Bonds), Junior Obligation.

KBRA’s Stable Outlook reflects the ample coverage of junior obligation debt service, supported by a broad-based, statewide source of revenues. The Outlook further reflects KBRA’s expectation that pledged sales tax revenues will continue to grow at a modest pace providing continued ample coverage of Build Illinois Bond obligations, and that future debt issuance authorized under the Act will not materially dilute coverage levels.

Key Credit Considerations

The rating actions reflect the following key credit considerations:

Credit Positives

  • Security provisions are strong and include a priority lien on the State sales tax revenues after payment of senior bonds, a continuing appropriation requirement, and strong non-impairment language.
  • Additional bonds test (ABT) requires 10.2x coverage of MADS, which significantly restricts the potential to over-leverage.
  • Expansive and diverse state-wide sales tax base that has historically provided extraordinary coverage of over 40.0x ADS for combined senior and subordinate Bonds.

Credit Challenges

  • Bonds are secured by sales taxes, which may at times be adversely affected by economic factors. Nevertheless, strong coverage levels and a highly restrictive ABT insulate outstanding Bonds from associated risks.

Rating Sensitivities

For Upgrade

  • Accelerated growth in pledged revenue collections, coupled with manageable debt levels.

For Downgrade

  • While unlikely, an instance wherein the State leverages debt levels to the ABT in combination with an extremely significant economic downturn that results in a sharp reduction in State sales tax revenues.

To access rating and relevant documents, click here.


Public Finance: U.S. Special Tax Revenue Bond Rating Methodology

ESG Global Rating Methodology


A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

Doc ID: 1002946


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