Chicago has selected its new senior manager and co-manager pools to underwrite future bond deals, about five months after it released its request for qualifications.
"We were really excited to have 45 respondents," said Steven Mahr, assistant commissioner and debt manager for the city's finance department.
"That was generally consistent with the number of responses that the city had received when we went through this process about four years ago," Mahr added.
With the process now complete, the city will have about a third of the respondents in its senior manager pool, and about a third of the respondents in the co-manager pool. The remaining third of respondents were not assigned to either pool. Mahr declined to name any of the firms selected.
"We chose firms that we think meet some of the highest standards in the municipal bond underwriting business," he said. "A lot of the firms that were chosen as part of the senior manager pool are in the senior manager pool for other large issuers across the country; the firms that are in the co-manager pool oftentimes are in the co-manager pool for large cities and states across the country."
The pool includes minority-, women- and veteran-owned firms, Mahr said. There is also a geographical mix; the city wanted firms with the capability to handle large and complex transactions, so it drew from a variety of types of firms.
"One of the things that we find valuable is when firms give us ideas based off transactions that they've done from across the country," Mahr said. "So a small firm or even a large firm located here in Chicago has a great sense of some of the challenges and opportunities that we have here locally. They understand the state law and some of the mechanics of our transactions.
"On the other hand, some of the larger firms from across the country have those case studies and ideas from a transaction in New York or California or Florida that we then oftentimes employ on our own transaction," he said.
"We had a quite robust process here at the city for analyzing the responses," Mahr said. The city's two independent registered municipal advisors, PFM and RSI Group, compiled extensive summaries of the responses. But the city — specifically, the CFO's office — did the majority of the analysis, Mahr said.
"We had about 10 team members analyze the responses, and we're really pleased with the process and the amount of time and attention that we put into this," he said. "We wanted to take our time in the evaluation of the responses, and we did just that."
The city has deals for Midway Airport and O'Hare Airport coming up this month and later this year, respectively. The precise timing is yet to be determined, Mahr said. There will be at least one large transaction, and maybe two separate transactions, for O'Hare.
"We have at this time nearly every year opportunities to refinance bonds," Mahr said. "This year we got opportunities to refinance bonds at both O'Hare and Midway. For both the O'Hare and Midway transactions, we're also expecting to issue some new money. That is the piece that is yet to be determined."
Rating agency reports have put the Midway transaction at around $400 million, and the O'Hare deal later this year at around $1.6 billion of new money debt.
On Friday the city posted a notice to the Municipal Securities Rulemaking Board's EMMA disclosure website
