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Chicago Issues $228 Million in Bonds

By Munichain News Desk

Chicago, Illinois, sold $227.9 million in wastewater revenue bonds to refund previously issued securities.

The bonds mature between 2025 and 2044, yielding between 2.97% and 3.96%. They pay interest at 5%. The securities received an underlying rating of A+ from Fitch Ratings, AA- from Kroll Bond Rating Agency, and A+ from S&P Global Ratings, which assigned an insured rating of AA.

The rating reflects the “Wastewater System’s strong financial flexibility, historically stable operating performance, and the favorable characteristics of the large and diverse service area,” Kroll analysts wrote.

Chicago will use the issuance proceeds to refund bonds that it sold in 2012 and 2014. A spokesman for the city’s finance department said that refunding the callable bonds will save it $22.2 million on a present-value basis, the Bond Buyer reported.

Chicago last sold wastewater revenue bonds in May 2023, when it issued $452.6 million in securities. Following the refunding, the city has $1.55 billion in wastewater revenue bonds outstanding, the vast majority of which are second-lien bonds.

The bonds are limited obligations of the city, payable by net revenue from the sewer system (after operations and maintenance expenses and a first-lien bond).

Loop Capital Markets LLC served as lead underwriter on the issuance, purchasing the bonds for $250.6 million. The price reflected a premium of $23.9 million and a discount of $1.2 million. The RSI Group, LLC and Baker Tilly Municipal Advisors, LLC acted as financial advisors.

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