CHICAGO - Gary, Indiana is set to enter the debt market this week for the first time in about seven years, and at the same time is advancing a plan for a second borrowing.
The Steel City is expected to sell $13.2 million of special tax revenue bond anticipation notes backed by casino revenues as soon as this week. The deal is unrated.
Siebert Brandford Shank & Co. is the underwriter. Proceeds will be used to pay judgments and medical claims against the city, pay debts owed to utilities, pay off deficits and finance certain capital improvements, according to preliminary bond documents.
The debt matures in May 2015. The city hopes to roll it over into long-term debt next year with its first credit rating in years.
The borrowing is part of the city's bid to rebuild its credit after years of absence from the debt market, Mayor Karen Freeman Wilson told The Bond Buyer in a recent interview. Hardwick Law Firm is bond counsel.
The BANs are limited obligations of the city, payable solely from the pledged casino tax revenues and other sources.
Meanwhile, the Gary City Council last week approved the sale of $2.8 million of revenue bonds. Proceeds would be used to renovate the former Gary State Bank, in downtown Gary, on behalf of developers who want to rehab the 100-year-old building with a new bank in the lobby.
The bonds would be repaid from tax increment financing dollars. They would mature in eight years, according to local reports.
The city's redevelopment commission still needs to approve the deal.
Gary's last sale was $5.3 million of general obligation judgement bonds in 2007, and the previous issue was 14 years earlier.
The city has $8 million of outstanding debt and carries no pension or other post-employment benefit obligation debt, both of which are the state of Indiana's responsibility.
