MuniMetrics MVP v6.6.5

State of Illinois

Bond / Issue: General Obligation Bonds / State Credit Review | Sector: State Government | Type: General Obligation | Status: Preliminary

AI Enabled: Yes

Workflow / Analyst Approval

Workflow Stage: Draft

Assigned Analyst: MZ Junior

Senior Reviewer: MZ Senior

Approved By: Not approved

Approved At: Not approved

Locked At: Not locked

Current user: MuniMetrics User | Role: Analyst. Configure these with MUNIMETRICS_USER_NAME and MUNIMETRICS_ROLE if desired.

▸ Mentor / Protégé Review

Purpose: This section lets a senior analyst mentor a junior analyst, review work in progress, request revisions, approve mentor review, and preserve institutional knowledge as part of the credit file.

Mentor notes are separate from the general audit log so training feedback remains visible and actionable.

Junior Analyst: MZ Junior

Senior Mentor: MZ Senior

Mentor Status: Not Submitted

Revision Due: 2026-07-05

Submitted At: Not submitted

Mentor Approved At: Not approved

Last Mentor Note: No notes yet

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Review Controls / Data Limitations

AI findings are draft evidence until analyst-approved.
Missing information is a review limitation, not automatically a credit weakness.
Final recommendations require analyst or senior reviewer approval.
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System Recommendation

Buy-Leaning / Analyst Review Required Score: 83 | Temporary Funding Dependency: Low

Basis: Strong rule-based score, but unresolved temporary-funding or document-mining flags require analyst validation before a final Buy.

Risk Flags
• High-risk temporary funding reference requires analyst review.

Category	Score
Financial Trend Strength	25
Economic Resilience	14
Debt Burden / Coverage	15
Temporary Funding Dependency	20
Governance / Disclosure Quality	4
Bond Structure Protections	5

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Manually enter annual revenue, expense, reserve, and temporary funding data when AI extraction is incomplete or requires analyst correction.

Documents Reviewed 1

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Audited Financials / ACFR ACFR_Final_2024_-_Bookmarked.pdf AI Summary Ready

Type:
Audited Financials / ACFR

File:
ACFR_Final_2024_-_Bookmarked.pdf

Uploaded:
2026-06-10T18:30:40.618652

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# Senior Credit Analyst Summary ## 1. Executive Credit View Preliminary credit implication: **Watch**. The provided excerpt is from the State of Illinois FY2024 Annual Comprehensive Financial Report, but it does **not** include the bond official statement, GO bond authorizing language, debt service schedule, rating reports, or detailed financial statements. Therefore, this is a **preliminary credit view only**. From the excerpt, the main supported credit observations are: - The State has a formal FY2024 ACFR with broad governmental, proprietary, fiduciary, component unit, pension, OPEB, and combining fund disclosures identified in the table of contents. Pages 7-8. - Several federal or temporary-support-related items appear in the excerpt, including CARES Act funds being spent down, a COVID-related unemployment trust fund repayment need, federal grant revenue in the Water Revolving Fund, and budgetary references to relief-related funds. Pages 15, 31, 32, 290. - The excerpt does **not** provide enough information to determine recurring structural balance, debt affordability, pension burden, liquidity, unrestricted reserves, or GO bondholder protections. Based only on the provid …summary truncated for page display.

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Annual Financial Trends 1

Year	Total Revenue	Recurring Revenue	Temporary Funding	Expenses	Debt Service	Fund Balance	Unrestricted Reserves	Adjusted Surplus	Action
2024	74,749,000,000	74,749,000,000	0	71,611,000,000	0	4,224,000,000	4,224,000,000	3,138,000,000

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Temporary Funding / Artificial Support Findings 8

Open a category, then expand individual findings to review evidence or update classification, risk, confidence, and analyst notes.

Budget stabilization 1

Unclear / Analyst Review Required Medium ACFR_Final_2024_-_Bookmarked.pdf | Page 11

Major fundsarethe focusofthe State’s financial statementsand includethe General Fund (includingthe General Revenue Account, the Education Assistance Account, the Common School Account, the Advancementof Education Account, the Commitmentto Human Services Account, andthe Budget Stabilization Account), the Unemployment Compensation Trust Fund, andthe Water Revolving Fund.

Classification

Risk Level

Confidence Analyst Note

CARES 1

Temporary Funding Medium ACFR_Final_2024_-_Bookmarked.pdf | Page 31

COVID 1

Unclear / Analyst Review Required Medium ACFR_Final_2024_-_Bookmarked.pdf | Page 15

ESSER 1

Temporary Funding Medium ACFR_Final_2024_-_Bookmarked.pdf | Page 138

Federal grant 1

Unclear / Analyst Review Required Medium ACFR_Final_2024_-_Bookmarked.pdf | Page 32

Provider Relief Fund 1

Capital-Only Funding High ACFR_Final_2024_-_Bookmarked.pdf | Page 290

Belowisa summaryof those differences: GAAP Basis Budgetary Basis Includes General Fund All General Funds Highway Funds: 1 fund includedasan other highway fund Special State Funds: Income Tax Refund Fund County Provider Trust Fund Long-Term Care Provider Fund Hospital Provider Fund Fundfor Illinois' Future Public Transportation Fund Drug Rebate Fund Healthcare Provider Relief Fundand 69 funds includedas other special state funds Debt Service Funds: Capital Projects Fund Federal Trust Funds: State CURE Fundand 2 funds includedas other federal trust funds State Trust Funds: State Employees' Deferred Compensation Plan Fund Public Assistance Recoveries Trust Fundand 8 funds includedas other state trust funds 291 --- Page 302 --- Stateof Illinois Combined Scheduleof Revenues, Expenditures, Other Sourcesand Usesof Financial Resources, and Changesin Budgetary Fund Balances - Budgetand Actual (Non-

Classification

Risk Level

Confidence Analyst Note

Reimbursement 1

Reimbursement Funding High ACFR_Final_2024_-_Bookmarked.pdf | Page 65

State aid 1

Unclear / Analyst Review Required Medium ACFR_Final_2024_-_Bookmarked.pdf | Page 203

Investment Thesis

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Recommendation: **Watch** ## Core Thesis: State of Illinois General Obligation Bonds screen as **Buy-leaning but not yet final-approval ready** based on the rule-based credit score of **83** and a reported fiscal 2024 surplus of **$3.138 billion** on **$74.749 billion** of total revenue and **$71.611 billion** of total expenses. Reported unrestricted reserves/fund balance were **$4.224 billion**, and the annual trend row shows **$0 temporary funding**, producing a **0.0% temporary-funding-to-revenue ratio** and no adjustment between reported and adjusted surplus. However, the review remains at **Draft / Preliminary** stage, only **one year** of financial trend data is provided, debt service is shown as **$0** in the supplied row, and several document-mining findings remain unresolved, including a system red flag that a **high-risk temporary funding reference requires analyst review**. Until those items are validated, the appropriate internal stance is **Watch** rather than final Buy. ## Why This Bond May Be Attractive: - **General obligation bond type** provides a broad state credit framework for review. - Fiscal 2024 reported results show a **$3.138 billion surplus**, with adjusted surplus also **$3.138 billion**. - Temporary funding dependency is currently measured as **Low**, with **$0 temporary funding** in the annual financial trend row. - Temporary funding equals **0.0% of revenue**, indicating no quantified reliance on temporary sources in the provided financial data …thesis truncated for page display.

Analyst Recommendation

Default is To Be Determined. Generating a thesis may auto-fill this from the system recommendation only if the analyst has not already selected a recommendation.

Status

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Thesis

Recommendation: **Watch**

## Core Thesis:
State of Illinois General Obligation Bonds screen as **Buy-leaning but not yet final-approval ready** based on the rule-based credit score of **83** and a reported fiscal 2024 surplus of **$3.138 billion** on **$74.749 billion** of total revenue and **$71.611 billion** of total expenses. Reported unrestricted reserves/fund balance were **$4.224 billion**, and the annual trend row shows **$0 temporary funding**, producing a **0.0% temporary-funding-to-revenue ratio** and no adjustment between reported and adjusted surplus. However, the review remains at **Draft / Preliminary** stage, only **one year** of financial trend data is provided, debt service is shown as **$0** in the supplied row, and several document-mining findings remain unresolved, including a system red flag that a **high-risk temporary funding reference requires analyst review**. Until those items are validated, the appropriate internal stance is **Watch** rather than final Buy.

## Why This Bond May Be Attractive:
- **General obligation bond type** provides a broad state credit framework for review.
- Fiscal 2024 reported results show a **$3.138 billion surplus**, with adjusted surplus also **$3.138 billion**.
- Temporary funding dependency is currently measured as **Low**, with **$0 temporary funding** in the annual financial trend row.
- Temporary funding equals **0.0% of revenue**, indicating no quantified reliance on temporary sources in the provided financial data.
- Reported unrestricted reserves/fund balance totaled **$4.224 billion** in fiscal 2024.
- Rule-based score is relatively strong at **83**, with high component scores for:
  - **Financial Trend Strength: 25**
  - **Temporary Funding Dependency: 20**
  - **Debt Burden / Coverage: 15**
  - **Economic Resilience: 14**

## Why This Bond Requires Caution:
- The rule-based recommendation is **Watch**, not final Buy, because analyst validation is required.
- The system specifically flags: **“High-risk temporary funding reference requires analyst review.”**
- Only **one fiscal year** of annual financial trend data is provided, limiting trend analysis.
- Debt service is listed as **$0** in the fiscal 2024 trend row, so debt-service coverage cannot be evaluated from the supplied data.
- Several temporary/artificial funding findings are unapproved and require analyst review.
- Governance / disclosure quality score is relatively low at **4**, and bond structure protections score is **5**.
- The review is still **Preliminary**, in **Draft** workflow stage, with analyst recommendation marked **To Be Determined**.

## Temporary Funding / Artificial Support Analysis:
Based on the annual financial trend data, temporary funding does **not currently appear to distort reported financial strength**, because fiscal 2024 temporary funding is listed as **$0**, and the reported surplus and adjusted surplus are both **$3.138 billion**.

However, the document-mining results include unresolved findings that need analyst validation:

- **Temporary Funding / Operating Support Indicators**
  - **CARES**: The ACFR excerpt states that operating grants and contributions decreased mostly due to a decrease in Federal CARES Act funds as remaining funds were spent down. This supports the need to determine whether prior operating support has rolled off and whether current-year operations remain structurally balanced without it.
  - **ESSER**: Classified as Temporary Funding with medium risk and high confidence, but the extracted finding text does not clearly quantify an operating revenue impact in the supplied data.

- **Capital-Only / Restricted or Non-Recurring Items**
  - **Provider Relief Fund / Healthcare Provider Relief Fund**: Classified as **Capital-Only Funding** with **High** risk and medium confidence. The excerpt references funds included in budgetary-basis reporting, but no quantified impact on operating results is provided.

- **Reimbursement Funding**
  - **Reimbursement**: The finding relates to internal service funds accounting for services provided to state agencies on a reimbursement basis. This may not represent artificial operating support, but it is classified as **High** risk and requires analyst review.

- **Unclear Items Requiring Analyst Review**
  - **Budget stabilization**: The Budget Stabilization Account is included within the General Fund structure, but the supplied excerpt does not quantify any draw or use.
  - **State aid**: The Common School Account provides funding for elementary and secondary education agencies, including General State Aid, but no temporary-funding impact is quantified.
  - **Federal grant**: The Water Revolving Fund increase was attributed mainly to increased federal grant revenue; the operating versus capital nature should be confirmed.
  - **COVID**: Fiscal 2023 included a **$450 million** appropriation as a loan from the General Revenue Account to the Unemployment Compensation Trust Fund to aid repayment of federal advances related to the COVID-19 pandemic. This is not quantified in fiscal 2024 operating results in the supplied data.

## Reported vs. Adjusted Credit View:
There is **no numerical difference** between the reported and adjusted credit view in the supplied data:

- Reported fiscal 2024 surplus: **$3.138 billion**
- Adjusted fiscal 2024 surplus: **$3.138 billion**
- Temporary funding: **$0**
- Temporary funding as a percentage of revenue: **0.0%**

The rule-based model therefore does not currently reduce fiscal 2024 results for temporary or artificial support. The main credit distinction is qualitative: the reported financial position appears solid based on the supplied fiscal 2024 row, but unresolved document-mining flags prevent final approval until the analyst confirms that temporary, capital-only, reimbursement, and unclear items do not materially inflate recurring operating performance.

## Key Follow-Up Before Final Approval:
- Confirm whether the **$0 temporary funding** entry in the fiscal 2024 annual trend row is complete and analyst-approved.
- Validate each unapproved temporary/artificial funding finding, especially:
  - CARES spend-down impact
  - ESSER classification and relevance
  - Provider Relief / Healthcare Provider Relief Fund treatment
  - Reimbursement funding classification
  - Budget Stabilization Account usage
  - Federal grant treatment in the Water Revolving Fund
  - COVID-related Unemployment Compensation Trust Fund loan context
- Determine whether any of the flagged items affected recurring operating revenue or only capital, restricted, reimbursement, or non-operating funds.
- Obtain or populate debt service data, since fiscal 2024 debt service is currently shown as **$0**.
- Add additional fiscal years if available to assess trend durability beyond the single 2024 data point.
- Complete senior analyst review given the review status is **Preliminary / Draft** and mentor status is **Not Submitted**.

## Final Analyst Note:
The credit screens positively on fiscal 2024 reported and adjusted results, with a **$3.138 billion surplus**, **$4.224 billion** of reserves/fund balance, and **0.0% quantified temporary funding dependency**. However, unresolved document-mining flags and missing debt-service context keep the thesis at **Watch** pending analyst validation.

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What it can do: Ask credit questions about this review, including uploaded/imported documents, extracted temporary funding findings, annual trend rows, score components, draft thesis, workflow status, and report logic.

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▸ Recent Audit / AI Q&A 12

Draft Thesis 2026-06-10T19:18:56.022379

AI/deterministic thesis generated; analyst recommendation auto-filled to Buy-Leaning / Analyst Review Required because it was not yet set.

Delete Document 2026-06-10T19:15:19.313568

Removed document record 'ACFR_Final_2024_-_Bookmarked.pdf' and 8 linked finding(s). Stored upload file was preserved.

Delete Document 2026-06-10T19:14:53.395471

Removed document record 'ACFR_Final_2024_-_Bookmarked.pdf' and 8 linked finding(s). Stored upload file was preserved.

Create Trend Rows from AI Proposal 2026-06-10T19:06:02.664765

Inserted 0; replaced 0; skipped existing 1.

Generate Proposed Trend Rows 2026-06-10T19:05:43.675684

Generated 1 proposed row(s) from ACFR_Final_2024_-_Bookmarked.pdf; rejected incomplete 0. Raw response excerpt: Deterministic State/Commonwealth ACFR parser extracted a usable General Fund trend row. AI was not required for numeric discovery.

Add Trend Row 2026-06-10T18:45:29.911752

2024

Extract Trend Rows Failed 2026-06-10T18:33:54.749944

{ "rows": [], "limitations": "The provided source text includes cover pages, table of contents, and limited narrative only. It identifies where General Fund and budgetary schedules appear in the ACFR, but does not provide actual revenue and expenditure amounts for any fiscal year. No usable annual trend rows could be extracted under the rule requiring both revenue and expenses/expenditures." }

Upload Document 2026-06-10T18:30:41.262156

ACFR_Final_2024_-_Bookmarked.pdf

Upload Document 2026-06-10T18:30:13.159295

ACFR_Final_2024_-_Bookmarked.pdf

Upload Document 2026-06-10T18:29:32.828886

ACFR_Final_2024_-_Bookmarked.pdf

Mentor Assignment Updated 2026-06-10T18:21:10.517094

Junior: MZ Junior; Senior: MZ Senior; Due: 2026-07-05

Create Review 2026-06-10T18:20:13.876080

Initial bond review created

MuniMetrics MVP v6.6.5

State of Illinois

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Investment Thesis