CHICAGO — The Illinois Finance Authority board this week advanced deals to help fund projects for the University of Chicago Medical Center and DePaul University and announced the successful pooling of federal recovery zone facility bond allocations from at least 15 cities and counties for Navistar International Corp.
DePaul, the largest Catholic university in the country, received preliminary approval for the sale of up to $165.6 million of new-money and refunding bonds planned for early next year. The deal will refund $50.6 million of debt sold in 2005 with a three-year adjustable rate that resets next April. It also will provide new money for various academic building projects at DePaul’s Lincoln Park campus and downtown Loop buildings.
Goldman, Sachs & Co. is senior manager and Chapman and Cutler LLP is bond counsel. DePaul carries ratings in the low single-A category from all three major rating agencies, though updated reviews are expected before the school returns to the IFA board for final approval. The university has an enrollment of more than 25,000 students.
The University of Chicago Medical Center received final approval for a sale of up to $92.5 million planned for later this fall to raise additional funds for the ongoing construction of its new pavilion. The project calls for a 10-floor facility with a lower level, bi-level mechanical penthouse, and rooftop helipad. Construction began on the pavilion in the spring of 2009 and should be completed by the end of 2012.
The Medical Center operates a main hospital and ambulatory care facility, a women’s hospital, and Comer Children’s Hospital on its main campus on the city’s South Side. The hospital plans to use a floating-rate structure supported by letters of credit from Bank of America and Wells Fargo Bank.
The hospital carries existing ratings in the low double-A category from all three rating agencies. Bank of America Merrill Lynch and Wells Fargo Securities are the senior managers and Loop Capital Markets LLC and Cabrera Capital Markets LLC are co-managers. Jones Day is bond counsel.
The board gave final approval to the Old Town School of Folk Music Inc.’s private placement of up to $10 million of bonds to refinance taxable debt and help pay for the construction and equipping of a new three-story building with studio, classroom facilities, and a 150-seat performance hall.
First Midwest Bank will directly purchase the bonds, which are secured by mortgages on the school’s properties. Ice Miller LLP is bond counsel. The sale is slated for later this month or next.
The school was first established in 1957 to teach and celebrate music and cultural expressions rooted in both American and global traditions. It has grown to serve an annual student base of 16,500 through 650 classes, making it one of the largest independent community schools in the country.
The project will “enable Old Town School to expand its dance and other music education programs and provide room for continued program growth,” according to IFA documents.
The IFA board last month advanced plans for the truck manufacturing company Navistar to borrow $145 million using recovery zone facility bonds for its new DuPage County corporate headquarters, but the borrowing hinged on pooling local government bond allocations under the stimulus program.
IFA executive director Christopher Meister told board members at their meeting this week that the agency — with the aid of Navistar real estate consultant Jones Lang LaSalle — should be able to price and close on the transaction in the coming weeks.
The counties of Coles, DeKalb, Douglas, DuPage, Edgar, Henry, Kankakee, Lake, Macoupin, and Winnebago and the cities of Aurora, Elgin, Joliet, Naperville, and Rockford provided allocation for the financing. Cook County also approved a separate financing for $90 million using the RZFB program to finance improvements to Navistar’s manufacturing facility in Melrose Park, which is located in Cook.
The company intends to sell fixed-rate, 30-year bonds that would carry its underlying rating of B1 from Moody’s Investors Service and BB-minus from Standard & Poor’s. Bank of America Merrill is the senior manager and Chapman and Cutler is bond counsel.
The RZFB program allows some for-profit companies to sell tax-exempt bonds for qualified projects without draining a state’s portion of private-activity volume cap.