by Robert Crump

The Metro Pier and Exposition Authority (the Authority) is scheduled to issue $923,210,000 in Refunding Bonds in order to refinance its debt on outstanding bonds. The negotiated sale is planned for sale on December 4th with Goldman Sachs and Morgan Stanley as the lead co-managers. These bonds have an amortization schedule between June of 2020 and 2057. It’s important to note that the Authority is a distinct entity from the City of Chicago and the State of Illinois in which it operates.

About the Bonds

Proceeds of the Series 2020A Bonds will be used to fully refund certain outstanding bonds from 2010. These Bonds are being offered on a forward delivery basis with option and mandatory redemption dates. A portion of the proceeds will be deposited with the holder of bonds issued by the authority in 2019 sufficient to pay their redemption price.

The Bonds shall be subject to redemption prior to maturity on and after December 15, 2029 at the redemption price of one hundred percent of the principal amount plus accrued interest. The Bonds maturing after December 14, 2045 are subject to various mandatory redemptions with proper advance notice. Potential investors should check out the prospectus to look for those redemption dates.

Additionally, the tax status of these Bonds is complex and potential investors should reference the prospectus for detailed information. To summarize; counsel is of the opinion that, subject to compliance by the Authority with certain covenants, interest on the Bonds is excluded from federal income tax and the federal alternative minimum tax. However, the same cannot be said for Illinois income taxes. Interest on the Series 2020A Bonds is not exempt from present Illinois income taxes. Since individual states differ on their taxing provisions and Illinois tax law is subject to change, potential investors should consult their own tax advisors with respect to the state and local tax consequences of owning the Series 2020A Bonds.

The Bonds are secured by a pledge of revenues as special, limited obligations of the Authority and includes amounts received by the Trustee from the Expansion Project Fund (a separate fund in the State Treasury). Moneys on deposit in the Expansion Project Fund come from Authority Taxes and State Sales Tax Deposits. Payments to the Trustee from the Expansion Project Fund are subject to annual appropriation by the State. Payment of debt service on the Bonds is not dependent upon revenue derived from operations of the Authority. The Bonds are not a debt of the State and should not be construed as a State guarantee of the debts of the Authority.

S&P has assigned the Series 2020A Bonds the rating of “BBB” (Outlook Stable) and Fitch has assigned the Series 2020A Bonds the rating of “BBB-” (Outlook Stable).

Metro Pier and Exposition Authority

The Authority was formed as municipal corporation in 1989 and is responsible for the operation of some of Chicago’s most iconic locations including McCormick Place, The Hyatt Regency, Marriott Marquis Chicago, and Wintrust Arena. McCormick Square is the largest convention center in North America boasting a staggering 2.6 million square feet of exhibition space. Both hotels have a combined room total over 2,400, and the Wintrust arena can seat up to 10,000 spectators.

Located in the heart of Chicago and directly adjacent to Lake Michigan, the Campus provides tremendous economic support to its neighborhood and the City as a whole. According to a report released by Nathalie P. Voorhees Center for Neighborhood and Community Improvement at the University of Illinois at Chicago, the Authority supports over 17,000 state and local jobs and generates $1.9 billion in local economic impact. Read more about the Authority financial statements here.

These details and more on purposes, security, risks and other matters pertaining to these Bonds can be found in the preliminary official statement, provided by MuniOS. After registering, if needed, visitors can link directly to the official statement by searching for ‘Metro Pier and Exposition Authority’.

These 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.

Potential investors should rely only on the official documents and figures provided in the official statement (prospectus). Although the numbers presented in this summary are primarily derived from public documents, including issuer audits, issuer reports and other public sources such as federal reporting agencies , they are not intended to replace official information presented in connection with the bond sale. Medians may differ from official sales documents due to methodology or survey base variances.