CHICAGO - Illinois Gov. Bruce Rauner has tapped an Illinois banker to lead the Illinois Finance Authority board.

Rauner's selection of Illinois banking executive Rob Funderburg to lead the board which governs the state's largest conduit marks one of his first moves to shape a key state-related agency with bonding authority.

A Rauner statement said: "Funderburg's background in business and as an entrepreneur makes him supremely qualified for the position."

Funderburg, who lives in Belvidere, is chairman of Alpine Bank and Trust, chairman of Alpine Bancorporation, Inc., and president and treasurer of both Funderburg Farms, Inc. and K-B Farms, Inc. His experience spans several industries including financial services, real estate development, and agriculture business. He donated $11,000 to Rauner, according to published reports.

Funderburg replaces longtime board chairman William Brandt, who heads up several companies that provide corporate and municipal restructuring advice. He was first tapped for the post by former Gov. Rod Blagojevich. His successor, Gov. Pat Quinn, kept him in the post after taking office in 2009 following Blagojevich's arrest on corruption charges.

The IFA is the state's lead conduit authority that provides not-for-profits access to the municipal market and manages the state's state revolving fund issuance. The agency, created in 2003 by consolidating a handful of separate conduits into one, issued $1.4 billion of bonds last year.

The agency's 15 board members are appointed by the governor and serve staggered three year terms with the board chairman tapped by the governor for two-year terms. Quinn has used the agency to promote economic development.

Funderburg attended the board's monthly meeting on Tuesday. His appointment to the board still must be approved by the state Senate for him to cast a vote.

Brandt said during the IFA's meeting last month he was proud of the agency's strides in financial management, the resolution of auditing issues, expansion of minority participation on deals with goals in place for expanding diversity. Brandt said he was most proud of the authority's two-thirds reduction in state moral obligation exposure on debt issuance. It's now down to about $36 million.

The board held its monthly meeting Tuesday during which members advanced an up to $145 million issue for Northwestern University. The university is also planning to issue up to $500 million of taxable bonds as part of its plan of finance although it does not need to sell the taxable piece through the IFA. The school's capital program totals more than $2.6 billion. The University previously issued $200 million of taxable bonds in 2012 and $586 million in 2013.

"The proposed financing will enable Northwestern University to finance a portion of a series of projects on a tax-exempt basis. The University plans to take advantage of its 'Triple-A' credit rating to optimize interest rate and repayment terms through the issuance of tax-exempt and taxable bonds across various maturities," IFA documents read.

Northwestern is a private higher education university with a combined enrollment on its Evanston and Chicago campuses of 16,096 full-time undergraduate and graduate students. The university carries current rating so triple-A from Fitch Ratings, Moody's Investors Service, and Standard & Poor's.

Bank of America Merrill Lynch is senior manager with RBC Capital Markets LLC and Siebert Brandford Shank & Co. LLC serving as co-manager.

Chapman and Cutler LLP is bond counsel, Shiff Hardin LLP is borrower's special counsel, Katten Muchin Rosenman LLP is underwriter's counsel ad Thompson Coburn LLP is IFA counsel. Sycamore Advisors LLP is advising the IFA. William Blair & Co. LLC is serving as financial advisor to Northwestern.

The board also advanced Palos Community Hospital's proposed refunding issue of up to $101 million that will be directly placed. The acute care hospital is located in southern Chicago suburb of Palos Heights with outpatient satellite facilities in the surrounding community.

JP Morgan Chase, Northern Trust, and other potential banks will directly purchase the bonds. Chapman is bond counsel, borrower's Counsel is Hawkins, Delafield and Wood LLP, issuer's counsel is Burke Burns & Pinelli Ltd and Acacia Financial Group Inc. is advising the IFA.

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