KBRA Assigns Ratings to Various Sales Tax Securitization Corporation Sales Tax Securitization Bonds (AAA) and Second Lien Sales Tax Securitization Bonds (AA+); Affirms Ratings for Outstanding Bonds and Second Lien Bonds

KBRA assigns a long-term rating of AAA to the Sales Tax Securitization Corporation Sales Tax Securitization Bonds, Refunding Series 2024A. KBRA additionally assigns a long-term rating of AA+ to the Corporation's Second Lien Sales Tax Securitization Bonds, Refunding Series 2024A and Second Lien Sales Tax Securitization Bonds, Taxable Refunding Bonds Series 2024B.

Lastly, KBRA affirms the long-term rating of AAA for the Corporation's outstanding Sales Tax Securitization Bonds and AA+ for the Corporation's Second Lien Sales Tax Securitization Bonds.

The rating Outlook is Stable.

Key Credit Considerations

The rating actions reflect the following key credit considerations:

Credit Positives

• The combination of State law, the bankruptcy remoteness of the Corporation, the Sale Agreement, and the Indenture provide the Bonds with a strong legal framework that KBRA believes will insulate the pledged sales tax revenues and the Corporation from the operating and credit conditions of the City.
• The broad base of goods and services included in the pledged revenues combined with a long track record of collection and distribution mechanics provide for strong underlying asset characteristics.
• Additional bonds test of 4.0x on first lien and 1.75x combined first and second lien obligations prevents the Corporation from diluting the substantial cushion provided by the pledged revenues.
• Chicago’s deep and diverse underlying economic base supports substantial residential and tourist retail activity.
• Strong projected coverage of monthly deposit and annual debt service requirements afforded by acceleration of standard set asides.

Credit Challenges

• The high overall sales tax rate in the City may adversely affect growth of the pledged sales tax revenues.

Rating Sensitivities

For Upgrade

• N/A

For Downgrade

• A significant decline in pledged sales tax revenues that results in material weakening of debt service coverage ratios.

To access ratings and relevant documents, click here.

Methodologies

• Public Finance: U.S. Special Tax Revenue Bond Rating Methodology
• ABS: General Global Rating Methodology for Asset Backed Securities
• ESG Global Rating Methodology

Disclosures

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.

Only those ratings on securities issued by this Issuer that also are denoted on the Security Ratings tab for this Issuer on KBRA.com as “endorsed” by Kroll Bond Rating Agency Europe Limited into the European Union and/or by Kroll Bond Rating Agency UK Limited into the UK are covered by the disclosures set forth in this press release and the corresponding Information Disclosure Form. No other ratings on issuances by this Issuer have been endorsed into the European Union or the UK, and the disclosures set forth herein and in the corresponding Information Disclosure Form are inapplicable to those ratings and may not be used for regulatory purposes by European Union or UK investors in these securities.

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 www.kbra.com.

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: 1006776

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