CHICAGO — The Illinois Finance Authority has expanded conduit powers to issue debt on behalf of nonprofits for projects outside state borders under legislation signed this week by Illinois Gov. Pat Quinn.
“I’m committed to keeping Illinois competitive, using every tool at my disposal to expand businesses headquartered in our state and to encourage others to locate and do business here,” the governor said in a statement. “This bill is yet another way to make it clear that Illinois means business.”
The IFA joins eight other states, including Illinois’ Midwestern neighbors Indiana and Missouri, that are among those with similar cross-border issuing authority on its books.
In the past, Illinois’ nonprofits have had to turn to local governments, economic development agencies, or out-of-state conduits to finance their projects elsewhere.
In addition to aiding economic development and keeping Illinois competitive with other states, the authority hopes to generate additional fees as it struggles with revenue concerns that last year prompted a round of layoffs.
The volume of financings from nonprofits in the coming year remains uncertain given the economy, and health care financings could fall as systems brace for the implementation of national health care reform.
“As a fully self-supporting agency, IFA funds its economic development work through the fees associated with these projects,” a statement from the agency read. “Multi-state authority is expected to bring in additional revenue to further expand IFA’s impact on the Illinois economy.”
Quinn also signed legislation that allows the authority to pool unused local allocations from various federal stimulus programs, including the recovery zone facility bond program and the recovery zone economic development bond program.
The IFA plans to contact local governments with unused allocations to identify potential projects.
The authority is also trying to spread the word on its ability to assist with the issuance of Midwestern Disaster Area bonds allocated to help those regions hit hard by flooding in 2008.
The state has $1.5 billion available for 18 counties designated as disaster areas.
Congress included the new category of tax-exempt bonds in the Heartland Disaster Tax Relief Act for counties hit hard by severe storms and flooding between May 20 and Aug. 1, 2008.
The program allocates tax-exempt private-activity bonds for eligible projects that don’t count against a state’s volume cap in affected counties in Iowa, Wisconsin, Missouri, Illinois, Indiana, Nebraska, and Arkansas.
The deadline for issuing bonds is Jan. 1, 2013.
At the IFA board’s meeting Tuesday, members approved a current refunding of up to $50 million of gas supply revenue bonds for the Peoples Gas Light and Coke Co. that were issued in 2000.
The original bonds provided tax-exempt financing for capital improvements for gas supply facilities owned by the investor-owned gas utility.
The utility will convert the variable-rate bonds to a fixed rate.
KeyBanc Capital Markets Inc. is the underwriter, and Chapman and Cutler LLP is bond counsel.
The board gave preliminary approval to the sale of $5.5 million of recovery zone facility bonds for Annex II LLC.
The project calls for construction of a single-story, 75,000-square-foot records storage facility in Monroe County. The expansion is needed due to the facility’s contract with the National Archives and Records Administration.
The bonds will be purchased by United Community Bank.
Stifel Nicolaus & Co. is financial adviser.