Moody's Investors Service has downgraded to A2 from A1 the rating on the Cook County Forest Preserve District, IL's general obligation (GO) debt. The district has $200 million in GO debt outstanding, $146.1 million of which is secured by the district's general obligation unlimited tax (GOULT) pledge and $53.9 million of which is secured by the district's general obligation limited tax (GOLT) pledge. The outlook remains negative.
SUMMARY RATING RATIONALE
The A2 rating on the district's GOULT debt reflects the district's growing pension liabilities, which are a consequence of statutorily-mandated contribution levels that are not based on actuarial standards of the Forest Preserve District Employees' Annuity and Benefit Fund of Cook County. The district's credit profile is also pressured by competing demands placed on the local property tax base from the debt and unfunded pension liabilities of Cook County (A2 negative), which is coterminous with the district, as well as the City of Chicago (Ba1 negative) and the Chicago Public Schools (CPS) (Ba3 negative), which represent half of the district's tax base. Finally, the district's governance ties to the county inform our credit opinion. The same group of people who serve on the Board of Commissioners of Cook County also serve on the Board of Commissioners of the Forest Preserve District of Cook County.
The A2 rating on the district's GOLT debt reflects the credit characteristics inherent in the A2 rating on the district's GOULT debt as well as ample debt service coverage provided by the district's debt service extension base (DSEB), which secures the district's GOLT debt. The DSEB levy is unlimited by rate but is limited by the amount of the district's DSEB, which provides ample coverage of the district's DSEB-secured debt.
