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Kroll Bond Rating Agency Assigns Long-Term Rating of AA to the Chicago Transit Authority’s Sales Tax Receipts Revenue Bonds, Series 2014

June 10, 2014



NEW YORK--(BUSINESS WIRE)-- Kroll Bond Rating Agency (KBRA) has assigned a long-term rating of AA with a stable outlook to the Chicago Transit Authority’s Sales Tax Receipts Revenue Bonds, Series 2014. This rating applies to all of the Chicago Transit Authority’s (CTA) outstanding Sales Tax Receipts Revenue Bonds but excludes bonds backed by a letter of credit or liquidity facility. After issuance of these Bonds, the Authority’s outstanding Sales Tax Receipt Revenue Bonds will total approximately $3.5 billion.

The Sales Tax Receipts Revenue Bonds are revenue obligations of the CTA, secured by a pledge and lien on Sales Tax Receipts received from the Regional Transit Authority and deposited into the Sales Tax Receipts Fund held by the CTA. Proceeds from the 2014 Bonds will be used to finance capital projects included in the CTA Capital Improvement Plan and approved by the Chicago Transit Authority Board.

KBRA’s rating of AA with a stable outlook is based on the strong current maximum annual debt service (MADS) coverage of 2.55x by pledged revenues, the use of Sales Tax Receipts to fund CTA operations after debt service, and the essentiality of the CTA as the provider of mass transit services to greater Chicago. KBRA views the statutes and financing documents as providing a strong legal framework for issuance of the CTA Sales Tax Receipts Revenue Bonds. All of the pledged revenue sources have shown strong consistent growth, with no declines, in the period between 2009 and 2013. The consistent growth in sales tax revenues reflects a strong recovery in retail sales in the Chicago area over the last five years.

This rating is based on KBRA’s U.S. Special Tax Rating Methodology, published on August 21, 2012.

About Kroll Bond Rating Agency

KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).



Kroll Bond Rating Agency

Analytical:

Kate Hackett, 646-731-2304

Managing Director

khackett@kbra.com

or

Alessandra D'Imperio, 646-731-2383

Senior Director

adimperio@kbra.com

or

Alice Cheng, 646-731-2403

Senior Analyst

acheng@kbra.com

Source: Kroll Bond Rating Agency


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