Chicago Moves Toward Borrowing $2.65 Billion More in 2016

  • Committee approves bond deals, sending them to full council
  • Debt is for projects, refinancing variable-rate securities

Chicago moved toward authorizing as much as $2.65 billion of borrowing in 2016, as the Windy City prepares to sell half a billion dollars of general-obligation debt.

The city council’s finance committee approved the bond offerings late Monday. The deals still need to be authorized by the full council and are expected to be considered during Wednesday’s meeting. Chicago is scheduled to sell $500 million of general-obligation bonds on Tuesday.

“What we’re bringing before you all today is our planned issuances for the entire year,” Carole Brown, Chicago’s chief financial officer, told aldermen. “It allows me the opportunity to work with our underwriters and with our finance team to figure out the most appropriate time to access the market.”

The proposed debt is made up of as much as $650 million of general-obligation bonds, some of which will be used to cover payments on previously issued securities. That’s down from Brown’s initial proposal to sell as much as $1.25 billion because of a cutback to the amount of new projects to be financed with the bonds. 

The committee also voted to recommend the issuance of $400 million of water bonds that will go toward projects, refinancing variable-rate debt to fixed rate and cover swap termination fees, which is estimated at about $100 million, Brown said. That debt is backed by revenue from the city’s water system.

Alderman also endorsed as much as $1 billion for Midway International Airport, as well as $200 million of sales tax-revenue bonds, including $70 million for new projects.

Chicago’s borrowing on Tuesday will refinance debt and provide cash to meet some of the city’s debt-service bills, according to bond documents. That deal was approved in September.

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