The Chicago Park District will sell as soon as this week $127 million of new-money and refunding general obligation bonds for park improvements and savings.
The deal consists of four series of debt, including three GO tranches of $35 million, $32 million, and $40 million, and two limited-tax GO tranches of $20 million and $40 million. About $112 million of the debt will refund outstanding bonds.
The new-money proceeds will fund infrastructure improvements to recreational facilities and parks, while the refunding is expected to generate significant net-present-value savings.
The district’s ratings of AA-plus from Fitch Ratings and Aa3 from Moody’s Investors Service were affirmed, while Standard & Poor’s upgraded the credit one notch to AA-plus, affecting a total of $857 million of debt.
“We expect that the district’s management will take the steps necessary to maintain balanced financial operations and its strong reserves,” Standard & Poor’s analyst John Kenward wrote.
The credit is supported by Chicago’s strong economic base, which underwent an expansion during the mid and late 1990s that produced a 4% population increase and consistent growth in the property tax base to a 2007 market value of $330 billion.
The credit benefited significantly from a cash infusion of $347.8 million in October 2006 after the district and city entered into a long-term lease to private operators of city- and district-owned downtown garages along Lake Michigan.
The Park District has future debt plans of $110 million to finance the expansion of its harbor system and $35 million for other capital projects.
