Illinois Gov. J.B. Pritzker’s first-year administration is not yet ready to tinker with the state’s underwriting pool for negotiated municipal bond sales.
The state is opting to extend for six months the current three-year term that runs through this month.
“We extended for six months and have not made a decision on timing yet for a new request for qualifications,” said Carol Knowles, spokeswoman for the Governor’s Office of Management and Budget. Several extensions are permitted.
Illinois last conducted a RFQ in 2016 and set a pool of 15 senior manager underwriting firms. The firms were chosen from 20 that submitted qualifications based on their scores in a competitive selection process launched in July to update underwriting pools.
The state uses both competitive and negotiated sales on its general obligation and sales-tax backed borrowing with statutes requiring that at least 25% of annual GOs be sold competitively.
For the current pool, the state selects firms for each transaction based on the specific firm's qualifications relative to the size and complexity of the contemplated issuance, participation in previous competitive sales, formal offers of credit and other value-added services. In the past, the state had set a rotation of firms by lottery.
State capital borrowing had ramped up after passage in 2009 of a multi-year, $31 billion Illinois Jobs Now infrastructure program. It tapered off in recent years although the state did sell $6 billion of bonds to pay down its bill backlog in 2017.
The state will decide this fall the timing of a $1.2 billion bill backlog borrowing. And capital borrowing is expected to pick up under the six-year, $45 billion capital program dubbed Rebuild Illinois. The plan relies on nearly $21 billion in borrowing, $10 billion in federal funds, $11 billion in pay-as-you-go financings, and $2.6 billion in local matching funds.
