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$750 million in new state bonds sold at “attractive interest rate”

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Illinois

* Press release…

Today the State of Illinois priced $750 million in new money General Obligation bonds for 2018 capital expenditures. Bond proceeds will be used to fund major capital construction projects and finance information technology projects.

The General Obligation bonds were priced competitively in two separate bids:

The $655,000,000 Series of December 2017A fixed-rate bonds with a final maturity in 2042 will be used to fund major capital construction projects. The 2017A bonds received eight bids and the bonds were awarded to Bank of America Merrill Lynch with a true interest cost of 4.33 percent.

The $95,000,000 Series of December 2017B fixed rate bonds with a final maturity in 2027 will be used to finance information technology projects. The 2017B bonds received 10 bids and the bonds were awarded to Bank of America Merrill Lynch with a true interest cost of 3.71 percent.

Today’s bond issue has an all-in borrowing cost for the combined series of 4.29 percent. The bonds are being issued as fully tax-exempt from federal taxation and are rated “BBB” by Fitch Ratings, “Baa3” by Moody’s Investors Service and “BBB-” by S&P Global.

“We are very pleased with the strong response that the State received on today’s competitive bids,” said Scott Harry, director of the Governor’s Office of Management and Budget. “These transactions will allow the State to move forward with funding to address essential capital and infrastructure needs at an attractive interest rate.”

Chapman and Cutler LLP and Hardwick Law Firm LLC are acting as co-bond counsel for the State. Chapman and Cutler LLP is the State’s disclosure counsel. The State’s financial adviser for the transaction is Sycamore Advisors LLC.

Um, those “attractive” interest rates were a direct result of the tax hike the governor vetoed, but who’s counting…

posted by Rich Miller
Wednesday, Nov 29, 17 @ 1:42 pm

Comments

So Rich, what you are saying is Harry’s statement is missing some “because Madigan”s?

Comment by Henry Francis Wednesday, Nov 29, 17 @ 1:57 pm
Nothing to brag about, after a huge tax increase Illinois GO bonds are still one notch above junk status. Plus we have the lowest credit rating of all 50 states so there is that. No doubt Amazon will take note !

Comment by Texas Red Wednesday, Nov 29, 17 @ 2:04 pm
==Um, those “attractive” interest rates were a direct result of the tax hike the governor vetoed, but who’s counting…===
THE Rich Miller, that’s who (in my best Walter Jacobsen voice) lol

Comment by A guy Wednesday, Nov 29, 17 @ 2:04 pm
So how much will Gov Rauner and his uber rich buddies make on this?

Comment by Honeybadger Wednesday, Nov 29, 17 @ 2:46 pm
Oh okay, so borrowing to spend more money is acceptable, but borrowing to consolidate debt and reduce payments on money you’ve already spent isn’t?

At least he’s consistent in his inconsistency.

Comment by Back to the Mountains Wednesday, Nov 29, 17 @ 2:55 pm
–Texas Red–
I have yet to hear a compelling reason why Amazon would care about the credit rating of Illinois. People keep bringing it up, but I can’t see why it matters. Amazon cares about talent, not state-level politics.

Comment by Keep Up Wednesday, Nov 29, 17 @ 2:56 pm
==Amazon cares about talent, not state-level politics.==

Yeah, why would a large business care about the largest debt sinkhole in the nation? It’s not like they’d eventually be force to pay for i … oh, wait.

Comment by Anonymous Wednesday, Nov 29, 17 @ 3:04 pm
$1.5 billion in GO Bonds today will ultimately cost the taxpayers $38,713,588,837.

Comment by Chicago 20 Wednesday, Nov 29, 17 @ 4:25 pm
I’m quite certain that wherever Amazon lands they will make out like bandits. Their deal will be highly lucrative, no matter who or where; they won’t be playing by the same rules as everyone else.

Comment by wordslinger Wednesday, Nov 29, 17 @ 4:35 pm
Chicago20, yup, that’s I terst over the long term.

Comment by Ron Wednesday, Nov 29, 17 @ 5:14 pm
Interest

Comment by Ron Wednesday, Nov 29, 17 @ 5:25 pm