Moody's Hits Illinois County With Steep Downgrade

CHICAGO — Moody's Investors Service knocked Kankakee County, Ill. and the city's public building commission's general obligation rating down three notches due to its ongoing struggle with operating shortfalls.

The rating was dropped to Baa1 from A1 and a negative outlook assigned on $14.4 million of rated GO debt. The rating on $6.6 million of limited tax debt certificates fell to Baa2 from A2 and a negative outlook was assigned.

"The Baa1 rating reflects the county's significant operating shortfalls that are projected to result in a deficit General Fund balance position at the close of fiscal 2013, leaving the county vulnerable to future financial stresses," Moody's wrote.

The rating also reflects the county's sizable tax base with relatively stable valuation trends, weak resident income indices, and modest direct debt burden with significant outstanding capital needs.

"The negative outlook reflects the likelihood that the county's financial position will continue to weaken given its limited revenue raising ability and ongoing expenditure challenges," analysts added.

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Illinois
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