CHICAGO - The Illinois Finance Authority board yesterday advanced plans for more than $1.7 billion of bonding by a dozen borrowers, including the University of Chicago, and hired a new executive director - the state's former top fiscal officer, John Filan.
Gov. Rod Blagojevich, who is responsible for IFA board member appointments, recommended Filan for the vacant director's post. The governor's office released a statement saying Filan was a good fit for the job promoting efforts to create and retain jobs during challenging economic times because of his experience.
"Since 2003, John Filan has worked tirelessly to make our state's government more efficient and effective for working families across Illinois ... I look forward to continuing my partnership with John as he works to create better jobs for more people throughout Illinois," Blagojevich's statement said.
Filan was an early appointee to the administration after the 2002 election, serving as state budget director. In January 2007, he was named chief operating officer overseeing the state's economic development, infrastructure, business regulation, and environmental agencies, as well as government operations, capital planning, and public finance. Filan's salary at the IFA has not yet been set. His predecessor made $160,000 plus a performance-based bonus.
Filan had been looking for a new position for several months and sought out the appointment as head of the agency he was instrumental in creating, sources said.
The state consolidated a handful of conduits into the IFA, which opened its doors in January 2004. It was the second-ranked issuer last year in the Midwest, selling $3.6 billion of debt in 85 transactions. It was first in 2006, selling $2 billion of debt in 70 transactions, according to Thomson Reuters. The executive director's post has been vacant for several months since the resignation of Kym Hubbard.
Filan said yesterday alternative energy projects will be a key focus of his during his tenure. The agency has given preliminary approval to a handful of major biodiesel and other alternative energy projects that would require some of Illinois' share of private-activity volume cap, but they've been on hold due to private financing issues.
"They've had financial challenges and we need to be more proactive," he said of assisting the projects in putting together their overall financing packages.
Filan sees greater opportunity for such projects in the near future in President-elect Barak Obama's administration, given his comments during the campaign and strong support for alternative energy projects from U.S. Sen. Richard Durbin, D-Ill.
Filan is also hopeful that the state will find greater support for a resurrected version of the pioneering FutureGen clean coal project. Federal energy authorities dismantled the project earlier this year. The $1.8 billion, 275-megawatt plant was to be built by a private, nonprofit consortium for the Energy Department in central Illinois.
In other business, the IFA board gave preliminary or final approval to more than $1.7 billion in borrowing, including $1.2 billion for health care facilities. The University of Chicago received final approval for its plans to sell up to $500 million of new money bonds to finance various projects on its Hyde Park campus and at other buildings near the campus over the next several years.
The projects include a new residence hall and dining facility, an expanded utility plant, chemistry lab renovations, a library addition and renovations, construction of a center for biomedical discovery, and other renovations.
The university expects to use a fixed-rate structure and will likely break the deal up into several tranches that will price in December and January, said chief financial officer Nimalan Chinniah. "It will all depend on what the market can bear," he said.
The prestigious school carries underlying ratings of AA from Standard & Poor's, AA-plus from Fitch Ratings, and Aa1 from Moody's Investors Service. It also carries its own short-term ratings. The university expects its fixed-rate bonds to sell uninsured.
The university is using Prager Sealy & Co. as financial adviser and Chapman and Cutler LLP as bond counsel. JPMorgan is the senior manager and Banc of America Securities LLC is co-senior. Goldman, Sachs & Co., Loop Capital Markets LLC, Morgan Stanley, and William Blair & Co. are co-managers.
At the urging of board members who are seeking greater participation for minority-owned firms, the university added Cabrera Capital Markets LLC and Jackson Securities LLC to the co-managers list.
The Admiral at the Lake received final approval for its proposal to sell up to $225 million to finance a replacement for continuing care retirement community north of downtown Chicago along the Lake Michigan shore. The facility - an evolution of the city's first home for the elderly, which was founded in 1858 as the Home for the Aged and Indigent Females - had struggled in recent years to attract seniors because of the smaller size of its apartments and a lack of amenities due to the building's age.
The CCRC's board in 2004 adopted a redevelopment plan and the current tenants have been relocated. Once completed, the facility will offer apartments that will include a mix of independent, assisted-living, and skilled nursing units. The building will offer a café, fitness center, swimming pool, library, and salon.
Nearly 70% of the 188 independent living units have been pre-sold, a key to advancing the bond deal. Construction is slated to begin in January and occupancy will be phased in beginning in October 2010.
Security for the bonds will include a mortgage and revenue pledge. Structural details have not yet been set. Ziegler Capital Markets is the lead manager and William Blair is a co-manager. Jones Day is bond counsel.
The Urbana-based Carle Foundation received final approval for its sale of up to $450 million. About half of the proceeds will retire a taxable loan that refinanced all of its tax-exempt debt issued in 1998 and 2004 and the other half to finance various new projects. The foundation is building a new 348,000-square-foot patient tower attached to its existing hospital tower. The hospital serves as the primary teaching facility for the University of Illinois at Champaign-Urbana.
The deal will include a mix of fixed-rate and floating-rate securities. The foundation carries an issuer rating of AA-minus from Standard & Poor's. Goldman Sachs and Barclays Capital are underwriters on the deal and Jones Day is bond counsel.