CHICAGO — Illinois has picked Public Financial Management Inc. to serve as financial adviser and Citi and Barclays Capital to lead a team of 11 broker-dealers on its sale of up to $1.75 billion of tobacco bonds planned for later this year to provide budgetary relief, sources said.
Members of the team will meet with the state on Wednesday to begin working on structural issues, according to public finance sources. The state is hoping to use a tax-exempt structure and would sell between $1.4 billion and $1.75 billion of debt with a maturity limited to 19 years. The bonds would be backed solely by tobacco settlement payments. The Railsplitter Tobacco Settlement Authority, created by the state for this purpose, will issue the bonds.