Fitch Rates Illinois $850MM GO Certificates 'F1+'.Business Editors NEW YORK--(BUSINESS WIRE)--June 15, 2004 Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. assigns Individuals to whom property is, will, or may be transferred by conveyance, will, Descent and Distribution, or statute; assignees. The term assigns is often found in deeds; for example, "heirs, administrators, and assigns to denote the assignable nature of an 'F1+' rating to the State of Illinois Illinois, river, United States Illinois, river, 273 mi (439 km) long, formed by the confluence of the Des Plaines and Kankakee rivers, NE Ill., and flowing SW to the Mississippi at Grafton, Ill. It is an important commercial and recreational waterway. (the state) $850 million general obligation certificates of June 2004 for bids on June 17. The notes have two equal maturities of $425 million each on July 23, 2004 and Oct. 22, 2004. Note issuance and payment are pursuant to a legislative act constituting an appropriation The designation by the government or an individual of the use to which a fund of money is to be applied. The selection and setting apart of privately owned land by the government for public use, such as a military reservation or public building. out of any money in the state treasury. The certificate order requires the treasurer and comptroller to transfer amounts sufficient for timely debt service payment into the general obligation bond retirement (GOBR) and interest fund (IF) from any funds of the state treasury. Budget agreement for fiscal 2005 has yet to be reached, and cash flow is therefore based on uncertain assumptions. Nevertheless, the 'F1+' rating reflects the breadth of the resources pledged to secure repayment of these general obligation notes representing revenues from any funds held in the state treasury, and the strength of the act under which these notes are issued providing a sum sufficient appropriation for debt service, thus requiring no further legislative action or budget adoption. Additionally, the comptroller and treasurer are required to ensure the transfer of such appropriated funds to the GOBR and IF as determined by the governor for the timely payment of debt service. The general obligation bonds of the state are rated 'AA'. The legislative act provides for note issuance to enable the payment this month of Medicaid Medicaid, national health insurance program in the United States for low-income persons; established in 1965 with passage of the Social Security Amendments and now run by the Centers for Medicare and Medicaid Services. liabilities, which would otherwise be cleared in July. The $850 million in earlier payments will allow the state to receive enhanced federal matching reimbursements rates, which are scheduled to lower after June 30 by about 3% to 50%. Net savings are estimated at about $22.6 million, including interest costs of the notes. The state has indicated federal reimbursements are generally received seven days following the processing of Medicaid payments and as such, the expected federal reimbursements are intended to generate sufficient amounts for the July 23 principal maturity, which constitutes half of the total note issue. Cash flows also indicate sufficient general fund resources to provide for the Oct. 22 principal maturity, although they are based on budget plans agreed to by the governor and senate but not the house. Nevertheless, note repayment is a general obligation, and repayment sources include any funds in the state treasury. In addition to the general fund, funds specifically identified in the July-October period include $150-$200 million in projected ending balances in the road fund and $390 million to $673 million in the GOBR and IF, if necessary. Also, state officials indicate that the Medicaid vendor payment cycle through October is now expected to be managed on a more current basis, up to 36 days, which could be lengthened length·en tr. & intr.v. length·ened, length·en·ing, length·ens To make or become longer. length  en·er n. , if necessary,
which would generate additional cash resources.
General fund operations continued to be pressured, not withstanding the use of pension bonds utilized in part to augment aug·ment v. aug·ment·ed, aug·ment·ing, aug·ments v.tr. 1. To make (something already developed or well under way) greater, as in size, extent, or quantity: operations this year. While tax revenues are improving, overall fiscal 2004 receipts are projected to be below original estimates as a result of the nonrealization of special budget measures, including the sale of a tenth gaming license, financing of the Thompson Thompson, city, Canada Thompson, city (1991 pop. 14,977), central Man., Canada, on the Burntwood River. A mining town, it developed after large nickel deposits were discovered in the area in 1956. Center, and other items. Such special measures Special measures is a status applied by Ofsted, the schools inspection agency, to schools in England when it considers that they fail to supply an acceptable level of education and appear to lack the leadership capacity necessary to secure improvements. were largely offset by $640 million in unbudgeted federal fiscal relief funds; however, a net $214 million shortfall Shortfall The amount by which the capital required to fulfill a financial obligation exceeds available capital. Notes: Shortfall risk is often combated with an efficient hedging strategy created by a fund, group, institution, or individual. from the original budget is now estimated. A June 30, 2004 ending general fund cash balance of $296 million is projected to be retained, and $276 million in the budget stabilization fund Stabilization fund may refer to:
Since budget adoption did not occur before June 1, a three-fifths legislative majority will now be required. Fiscal 2005 general fund cash flows include revenue enhancements revenue enhancement An increase in revenues, especially by way of increased taxes. Revenue enhancement includes reducing taxpayer deductions and eliminating tax credits. proposed for the full fiscal year totaling $837 million, including fund transfers to the general fund of $416 million in July, bolstering cash balances through the first one-third of the year. However, cash flows realistically assume continued non-attainment of most of the special budget measures from last year. The July ending cash balance, after the note principal payment, is an ample $669 million, although the October ending cash balance is only about $200 million after the October principal payment. No additional short-term note issuance is expected. Tax revenue growth assumptions contained in the cash flows are very reasonable. Following eleven-month collections, fiscal 2004 estimates have been increased from those in the executive proposed budget submitted in February; however, fiscal 2005 estimates have not been upwardly revised. |
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