CHICAGO — Chicago Mayor Rahm Emanuel Thursday introduced to the City Council ordinances seeking approval for up to $500 million of general obligation bonds and the authority to refund up to $250 million of sales tax revenue bonds.

The deals would mark the first major bond offerings from the city since Emanuel took office in May and installed a new finance team led by chief financial officer Lois Scott.

The GOs would finance “capital projects, equipment, and retroactive payments related to salaries for firefighters,” Scott said in a statement. The firefighter payments stem from a union contract settlement entered into by Emanuel’s predecessor, Richard Daley, who did not seek re-election earlier this year.

“We are taking advantage of current interest rates, which are at or near the lowest rates ever recorded.  This market provides an excellent opportunity to lock in low borrowing rates, saving our taxpayers going forward,” Scott said.

Chicago recently conducted a request for qualifications process to establish pools of senior and co-managers for use on its bond sales all of which are done on a negotiated basis.

The city picked Loop Capital Markets LLC to serve as senior manager on the sales tax issue. Bank of America Merrill Lynch and Cabrera Capital Markets LLC are co-seniors and another five firms round out the team. Austin Meade is the financial advisor. Peck Shaffer & Williams LLP and Golden & Associates are bond counsel. Ungaretti & Harris LLP and Sanchez Daniels & Hoffman LLP are underwriters’ counsel.

BMO Capital Markets is senior manager on the GO sale. Mesirow Financial Inc. and Estrada Hinojosa & Co. are co-senior managers. Another seven firms rounding out the team. A.C. Advisory Inc. is financial advisor. Chapman and Cutler LLP and Cotillas & Associates are bond counsel. Duane Morris LLP and Hardwick Law Firm are underwriters’ counsel.

The deals, expected to price before the end of the year, give prominent positions to several African-American-, Latino-, and women-owned firms, which is typically the first question posed by City Council members during Finance Committee meetings, where Chicago’s bond issues are reviewed. The city adheres to a goal of handing at least 25% of its bond work to minority- and women-owned firms.

The deals come as the city has begun its budgeting process in earnest. Emanuel’s team is grappling with a $635.7 million shortfall in the 2012 budget. Economic pressures and the use of one-shots last year drove a round of downgrades of nearly $7 billion of GO debt and the city paid a premium to borrow, even on sewer and revenue bond issues with healthy debt-service coverage ratios.

Fitch Ratings last year dropped Chicago’s GOs one notch to AA-minus and Standard & Poor’s dropped them to A-plus. Moody’s Investors Service in August lowered them to Aa3. All three agencies have stable outlooks.

Emanuel vowed recently to avoid one-time revenue gimmicks and not to raise major taxes or cut the police force to deal with the deficit in the budget he will submit to the City Council in October. Moves by the city towards a structurally balanced budget could lower its interest penalties, municipal participants have said.

The city’s recent RFP asked firms in their submissions to make one to three policy recommendations to address its structural budget imbalance. Chicago ranked second after Illinois among Midwestern issuers last year, issuing $3.4 billion in 26 transactions, according to Thomson Reuters.

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