CHICAGO — The new administration running Cook County, Ill., is conducting its first request for proposal process to assemble a finance team to lead debt issuance over the next two years.
The county this week posted RFPs for firms interested in serving as its senior manager, co-manager, and financial adviser on both short-term and long-term debt issues. The documents are available at
Firms have until April 8 to respond. Qualified firms will be entered into a pool and selected on a deal-by-deal basis, according to the RFPs.
The county will hold a pre-proposal conference March 23 at the county bureau of finance office in downtown Chicago.
Cook County expects to a pick a team by the end of April and award contracts by May. The bulk of the county’s bond transactions over the next two years is expected to restructure its outstanding general obligation debt to generate savings in the current $3.1 billion budget. Cook is the second-largest county in the U.S., and has $3.8 billion of outstanding bonds.
Current board President Toni Preckwinkle took the helm late last year after beating former President Todd Stroger in the election. As part of an effort to bring down a record $487 million deficit, one of Preckwinkle’s first proposals was to refinance debt to push off near-term debt payments.
The current plan is to restructure $271 million of GO debt as soon as this spring. Officials said they expect the refunding to generate $60 million in net present-value savings. The tentative structure would include pushing off $87 million of debt service payments due in 2011, reducing them to $126 million from $213 million.
The county also plans to restructure $92 million of payments scheduled for 2012 and 2013, according to chief financial officer Tariq Malhance.
Refunded debt will likely include a mix of tax-exempt bonds and taxable pension bonds sold in 2010. The restructuring will increase debt service payments from 2014 through 2031, Malhance said in a previous interview. Preckwinkle tapped Malhance, a former Chicago comptroller, as her new CFO in January.
Fitch Ratings, Standard & Poor’s, and Moody’s Investors Service all rate the county double-A with stable outlooks.
The board last month passed a fiscal 2012 budget that brings down a record $487 million deficit with a mix of cuts, one-time revenue measures, and the savings expected to be generated by the debt restructuring.
As part of the budget, the board voted to eliminate a sales tax hike by halving it in 2012 and cutting the rest in 2013. Stroger pushed through the 1% increase in 2008, and some said it was to blame for his loss to Preckwinkle in the Democratic primary last February.
