Aug. 06--The state budget stalemate led two Wall Street ratings agencies Wednesday to downgrade by several notches more than $3 billion in bonds issued by the agency that runs Navy Pier and McCormick Place.
Both Standard Poor's Ratings Services and Fitch Ratings kept the debt ratings of bonds used to build facilities near McCormick Place three levels above junk status, but S also placed it on a negative watch and Fitch gave it a negative outlook.
Although the Metropolitan Pier and Exposition Authority has more than enough money to make bond payments, it did not make a required $20.8 million monthly payment July 20 to a trust account because of lack of state authorization, according to the ratings reports. Enough money must be in that account to make debt service payments that are due Dec. 15.
Senate lawmakers had hoped to avoid the downgrade, and a day earlier passed legislation that would allow McPier to make the debt payment in spite of the budget impasse that had held up those dollars. S was dismissive of that legislation, saying its passage would not affect the rating.
"Unfortunately, this was an avoidable consequence of the current budget issues, and as noted in the Standard Poor's report, there are more than enough funds available. We simply need the legislative authority from the State of Illinois in order to transfer the funds." McPier CEO Lori Healy said in a statement. "We are hopeful that the hotel and event center construction will continue as planned."
Healy was referring to a hotel and arena being built near McCormick Place. The arena, which also will be used for DePaul University basketball games, and the hotel have been controversial because the overall project was made possible with $55 million in funding from a special city taxing district.
Chicago Tribune's Monique Garcia contributed from Springfield.
hdardick@tribpub.com
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