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Chicago Community College District Issues $187 Million in Bonds

By Munichain News Desk

The community college district representing public community colleges in Chicago, Illinois, sold $186.6 million in bonds to refund previously issued securities.

The bonds mature between 2027 and 2043, yielding between 2.92% and 3.91%. They pay interest at 5%. The securities received a rating of A+ from Fitch Ratings and BBB+ from S&P Global Ratings, which assigned an insured rating of AA. Fitch upgraded the district’s outlook from stable to positive.

The rating “​​reflects slow revenue growth, solid expenditure flexibility, a moderate long-term liability burden, and consistent efforts in support of financial flexibility,” Fitch analysts wrote. They added that the upgrade in outlook “reflects the district’s steady improvements in financial resilience, with a buildup of reserves providing the district strong gap-closing capacity.”

The bond proceeds will refund securities the district issued in 2013.

The City Colleges of Chicago system is the third-largest community college district in the United States, enrolling 62,000 students across seven colleges and five satellites. 

An uptick in enrolled students after years of decreases has contributed to improving economic conditions for the district. Enrollment trends in the district now outpace statewide averages, with a year-over-year enrollment increase of 13% in spring 2023. The district’s management cited ongoing financial aid programs, hybrid and online classes, mental health support for students and faculty, and infrastructure upgrades as reasons for the enrollment increase, according to Fitch. The increase has coincided with an operating surplus, which follows years of deficits in district revenue.

The bonds are general obligations of the district, backed by its full faith and credit and payable by tuition, fee, and state grant revenue.

Loop Capital Markets LLC served as lead underwriter on the issuance, purchasing the bonds for $208 million. The price reflected a premium of $22 million and a discount of $1 million. PFM Financial Advisors LLC acted as financial advisor.

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