Pritzker Announces $1.8 Billion State Bond Sale

On Wednesday, May 8, 2024, Governor J.B. Pritzker announced that the State of Illinois has sold two series of General Obligation Bonds totaling $1.8 billion to provide funding for capital projects, this includs projects authorized under the Rebuild Illinois capital program and for accelerated pension payments pursuant to the state’s ongoing pension buyout program.

“Once again, continued fiscal responsibility and discipline have paid off in a big way for the state of Illinois, funding essential state infrastructure programs and reducing pension obligation costs,” said Gov. Pritzker. “The market has recognized that Illinois is no longer a mismanaged, unreliable state to do business with. We are now seen as a constantly growing and expanding economy benefitting from saving, investing, and shepherding taxpayer dollars responsibly.”

“After nine credit upgrades, the State of Illinois received tremendous feedback from the bond market today, and especially from retail investors, who came in at approximately $1.5 billion in orders given the stronger ratings,” said Paul Chatalas, Director of Capital Markets for the State of Illinois. “Based on this very strong demand, the State accelerated its pricing to capture positive momentum and received more than $12 billion in overall orders from 150 accounts. The final result showed some of the tightest credit spreads the State has received in recent history and a notably expanded base of investors who have shown that the State’s tremendous fiscal progress are already paying off for the citizens of Illinois.”

The Rebuild Illinois capital program, enacted in 2019, is the largest infrastructure program in the State’s history. The pension benefit acceleration program allows program participants to receive an accelerated lump-sum payment in lieu of the right to receive future pension payments.

The $250 million taxable Series of May 2024A Bonds mature in 2025 through 2034 and fund capital projects and the pension acceleration program. The $1.55 billion in tax-exempt Series of May 2024B Bonds mature in 2025 through 2049 and fund capital projects.

The G.O. Bonds were offered in two separate series in a negotiated sale, with an aggregate true interest cost of 4.270 percent. The bonds are rated A3 (positive outlook) by Moody’s Investors Service; Inc., “A-“ (stable outlook) by S&P Global Ratings; and “A-“ (stable outlook) by Fitch Ratings, Inc.

Joint senior managers for the transaction are Jefferies LLC, Siebert Williams Shank & Co., LLC, and Barclays Capital, Inc.; co-senior managers include Cabrera Capital Markets LLC, J.P. and Morgan Securities LLC, and Stifel; co-managers include Academy Securities, Estrada Hinojosa, Janney Montgomery Scott, and Stern Brothers.

Chapman and Cutler LLP and McGaugh Law Group LLC, are serving as co-Bond Counsel. The underwriters’ counsel is Mayer Brown LLP. The state’s financial advisor is Public Resources Advisory Group, Inc.