Featured Municipal Bond in the Market, Week of 01/16/2017: City of Chicago General Obligation Bonds – $1.2 Billion

This week’s featured bond comes from the State of Illinois. The City of Chicago is issuing tax-exempt and taxable general obligation bonds in the amount of $1.16 billion the week of January 16, 2017. These Chicago general obligation bonds are scheduled to be issued in two series; Series A is $887 million in tax-exempt project and refunding bonds, and Series B consists of $275 million in taxable project bonds. The purposes and uses of the bond proceeds are as follows:

  • Series A
    • Pay a portion of the costs of “2017 Projects”
    • Refund or pay interest on currently outstanding general obligation bonds of the City
    • Additional interest and issuance costs
  • Series B
    • Pay a portion of the costs of “2017 Projects”
    • Pay certain City judgments and settlements
    • Repay City debt under its Short Term Borrowing Program
    • Additional interest and issuance costs

Bond proceeds are authorized to be used for one or more of the following projects: public right-of-way infrastructure improvements; economic development and transportation infrastructure improvements; acquisition of and construction of real property and property improvements; grants to not-for-profit service organizations, and other various purposes. The bonds are general obligations, the full faith and credit of the City is pledged, and the bonds are secured by the unlimited ability to levy ad valorem property taxes. Further details on the purposes, security, tax-status, and other matters pertaining to these City of Chicago general obligation bonds can the found in the preliminary official statement, provided by MuniOS.

As of November 2016, the Chicago-Naperville-Elgin Metropolitan Area has an unemployment rate of 5.3%, which is 0.4% lower than the same time last year, and 0.6% higher than the national rate.

Chicago general obligation bondsProvided at left is a quick snapshot of financial characteristics of the City of Chicago as of 12/31/2015, along with the medians for other city governments for 2014-2015, courtesy of Merritt Research Services, LLC. Merritt has many of the sector medians publicly available and regularly updated on their Benchmark Central page. (Merritt believes the data to be reliable but does not make any representations as to its accuracy or completeness)In addition to the Merritt information related to the featured bond, more information can be found on our municipal bond calendarcity, state, and county pages, and our employment databaseThese facts and numbers are for informational purposes, and should not be considered an official disclosure for potential investors. Investors should consult the official statement. None of the information provided should be construed as a recommendation by MuniNet Guide, MuniNet LLC, Merritt Research Services LLC, or any of their employees. Information and analysis is for informational purposes only.