CHICAGO — Moody's Investors Service stripped Kankakee County, Ill. of its investment grade rating citing the county's fiscal struggles and warned it might not stop.
Moody's downgraded the rating three levels to Ba3 from its lowest investment grade level of Baa3 on July 30. The rating agency assigned a negative outlook. The rating applies to $17.2M of general obligation debt. GO certificates were lowered to B1 from Ba1.
The ratings reflect "the county's distressed financial position and liquidity challenges, limited financial flexibility, and volatile revenue structure," Moody's said. "Balanced against those credit challenges are the county's strengths that include a modest debt and pension burden, sizable tax base, and a management team that has demonstrated a willingness to enact substantial expenditure reductions."
The negative outlook reflects analysts' view that that the county's financial position will continue to deteriorate given limited revenue raising and expenditure options. "Failure to restore operational balance will place increasing strains on the county's ability to meet its cash flow needs," Moody's warned.
The county is located about 60 miles south of Chicago and has a population of about 113,449.