An Illinois state authority sold $120 million in taxable bonds to make capital improvements at a laboratory leased to the U.S. Department of Energy and run by the University of Chicago.
The bonds, issued by the Illinois Finance Authority, include serials and term bonds. The serials, consisting of $52 million, mature between 2024 and 2029, yielding between 6.279% and 6.793%. The term bonds, consisting of $68 million, mature on July 1, 2033, yielding 6.693%. The securities received a rating of A2 from Moody’s Investors Service.
“The A2 rating reflects the strength of the United States government (Aaa stable), acting through the Department of Energy (DOE), to make timely lease payments, and the essentiality of the facilities to carry out the mission of the DOE,” according to Moody’s.
The bonds will finance improvements at Argonne National Laboratory, a research and development center southwest of Chicago that conducts research in several scientific disciplines, including supercomputing. The proceeds will support renovations at the laboratory’s Theory and Computing Science Building.
The issuance comes as the Joe Biden administration hones its focus on supercomputing as an arena of competition with China. Last week, Biden issued an executive order banning outward investment in several Chinese sectors, including quantum computing and artificial intelligence. The administration has simultaneously sought to encourage manufacturers of advanced chips, which are integral to supercomputers, to build factories in the United States and avoid selling to China.
Argonne has long hosted research in technologies critical to U.S. national security. The laboratory originated in the 1940s, when the physicist Enrico Fermi used it to carry out work on nuclear reactors for the Manhattan Project.
The bonds are special, limited obligations of the Illinois Finance Authority, payable by revenue from the lease to the DOE.
Fifth Third Securities, Inc served as underwriter on the issuance, purchasing the bonds for $118 million. The price represented a discount of $2 million.