Illinois $600M Build Illinois Bond Financing

Katten Team Guides Illinois’ $600 Million Build Illinois Bond Offering

illinois secured $600 million in funding for crucial capital projects through a bond series expertly guided by the legal team at Katten, demonstrating continued investment in the state’s infrastructure. The financing, which closed on December 11, will support a range of initiatives designed to bolster illinois’ economic future.

Financing Details for Build Illinois

The Build Illinois (BI) bond series comprises three distinct tranches, each designed to meet specific financing needs adn attract a diverse range of investors. All three series are structured as tax-exempt bonds, offering attractive returns while supporting public infrastructure development.

A Katten team, led by Government and Public Finance Partner Kelly Hutchinson, with Counsel michela Daliana, and Associates Tommy Sandstrom and Jeremy Stevenson, served as co-bond counsel for the State of Illinois throughout the process. Sandstrom, a candidate for the Illinois State Bar, contributed to the team’s success.

Did you know? – Tax-exempt bonds,like those issued in the Build Illinois series,are frequently enough favored by investors in higher tax brackets as the interest earned is exempt from federal income tax.

Series A: Long-Term Stability

The Series A bonds, totaling $300 million, are slated to mature between 2026 and 2035. Investors in this tranche will benefit from a true interest cost of 3.024 percent, reflecting a strong demand for long-term, stable investments in Illinois.

Series B: Mid-Range Investment

series B,valued at $150 million,offers maturities spanning from 2036 to 2040. This series carries a true interest cost of 3.867 percent,appealing to investors seeking a balance between risk and return.

Series C: Future-focused Growth

The final tranche, Series C, amounts to $150 million and extends to maturities between 2041 and 2045. With a true interest cost of 4.494 percent, this series targets investors with a longer-term outlook and a willingness to capitalize on Illinois’ projected economic growth.

Pro tip: – True interest cost (TIC) is a more comprehensive measure of borrowing costs than the coupon rate, as it considers the bond’s price and redemption provisions.

The successful completion of this bond offering underscores Illinois’ commitment to strategic infrastructure investment and its ability to attract capital from a broad spectrum of investors.This funding will be instrumental in driving economic development and improving the quality of life for residents across the state.

Why: The State of Illinois issued $600 million in bonds to fund critical infrastructure projects, aiming to stimulate economic development and improve quality of life for residents.

Who: The State of Illinois, with legal counsel from Katten (led by Kelly Hutchinson, Michela Daliana, Tommy Sandstrom, and Jeremy stevenson), was the issuer. Investors from various sectors purchased the bonds.

What: The Build Illinois (BI) bond series was comprised of three tranches – series A ($300 million), Series B ($150 million), and Series C ($150 million) – each with varying maturity dates and interest rates.

How did it end?: The bond offering successfully closed on December 11, securing the full $600 million in funding. The funds will now be allocated to infrastructure projects across the state, with the bonds maturing between 2026 and 2045 depending on the series purchased.