CHICAGO Financial advisory firms interested in working on potential Chicago Transit Authority deals have until late this week, and broker-dealers until the middle of next week, to submit proposals under a request for interest and qualification process now underway.
Financial advisory firms are being sought on an as-needed basis to make financing recommendations on the agencys operating and capital funding needs, and to assist in structuring possible deals and pricing. Firms have until 3:30 p.m. Central Daylight Time Friday to submit proposals.
Underwriters interested in being included in the agencys pre-qualified list of underwriters selected on an as-needed basis also have until May 25 to submit their documents. Firms are being sought to review the agencys capital funding structure and suggest financing options, to assist in drafting any legislation needed, and for structuring, marketing, and pricing work on deals.
The cash-strapped agency last sold debt in the fall when it issued $250 million of triple-A insured federal transit grant anticipation bonds that were secured by a full funding agreement with the federal government for the renovation of a train line.
The agency currently has a five-year $2.9 billion capital program including $818 million in fiscal 2005 aimed at moving the system to a state of good repair, according to CTA documents. The system has another $2.2 billion of unfunded capital needs to meet over the next five years.
The agency is struggling on both the operational and the capital side. CTA officials have warned that without an additional $55 million in state aid for operations they will have to raise fares, lay off 2,000 employees, and eliminate 50 bus routes and one train line this July.
Gov. Rod Blagojevich has proposed eliminating a tax exemption corporations now receive on paying sales taxes on their computer software purchases a plan that would raise $65 million annually for public transportation needs. Lawmakers, who are entering the final weeks of their annual spring session, have yet to act on the proposal.
On the capital side, CTA officials, along with officials from their parent agency, the Regional Transportation Authority, have warned lawmakers that without additional borrowing capacity they will have to put some projects and maintenance on hold.
The RTA has only about $117 million left under a $1.3 billion Strategic Capital Investment Program bonding authorization approved in 1998. The state reimburses the agency for SCIP bonds, and RTA officials have said they dont have the financial resources to borrow unless the state agrees to help repay the debt.
