$550,000,000* General Obligation Bonds, Series of June 2016 Investor - PowerPoint PPT Presentation

State of Illinois $550,000,000* General Obligation Bonds, Series of June 2016 Investor Presentation June 6, 2016 *Preliminary, subject to change. 1

Disclaimer The purpose of this presentation is to provide potential investors and others with information about the proposed offering of securities described herein; however, this presentation is not part of the “preliminary official statement” or the “final official statement” as those terms are defined in SEC rule 15c2-12. This presentation is qualified in all respects by reference to the Preliminary Official Statement, and prospective purchasers of the State of Illinois General Obligation Bonds, Series of June 2016 should rely only on the Preliminary Official Statement, and not this presentation, in making an investment decision. This presentation does not constitute a recommendation or an offer or solicitation for the purchase or sale of any security or other financial instrument, including the Bonds, or to adopt any investment strategy. Any offer or solicitation with respect to the Bonds will be made solely by means of a Final Official Statement, which describes the actual terms of the Bonds. There shall be no sale of securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. To the extent there are conflicts between statements made in the Preliminary Official Statement and this presentation, the information contained in the Preliminary Official Statement should be deemed more reliable. You should consult with your own advisors as to such matters and the consequences of the purchase and ownership of the Bonds. No assurance can be given that any transaction mentioned herein could in fact be executed. Past performance is not indicative of future returns, which will vary. Transactions involving the Bonds may not be suitable for all investors. You should consult with your own advisors as to the suitability of the Bonds for your particular circumstances. This presentation Preliminary Official Statement contains “forward -looking statements. ” Forward-looking statements include all statements that do not relate solely to historical or current fact, and can be identified by use of words like “may,” “believe,” “will,” “expect,” “project,” “estimate,” “anticipate,” “plan,” or “continue . ” These forward- looking statements are based on the current plans and expectations of the State and are subject to a number of known and unknown uncertainties and risks, many of which are beyond its control, that could significantly affect current plans and expectations and the State’s future financial position including but not limited to changes in general economic conditions, demographic trends and federal programs which may affect the transfer of funds from the federal government to the State. As a consequence, current plans, anticipated actions and future financial positions may differ from those expressed in any forward-looking statements made by the State in this presentation. Investors are cautioned not to unduly rely on such forward-looking statements when evaluating the information presented in this presentation. These forward looking statements speak only as of the date of this Investor Presentation / the Preliminary Official Statement of June 6, 2016. The State disclaims any obligation or undertaking to release publicly any updates or revisions to any forward looking statement contained herein to reflect any change in the State’s expectations with regard thereto or any change in events, conditions, or circumstances on which any such statement is based. Given these uncertainties, readers are cautioned not to rely on forward-looking statements. This electronic presentation can be found at MuniOS.com, http://roadshow.munios.com/rs/ssouv, this link expires on 6/16/2016 The Preliminary Official Statement for this issue can be found at MuniOS.com, https://www.munios.com/munios-notice.aspx?e=SSOUV The Preliminary Official Statement for this issue can be found at www.emma.com under CUSIP 452152 2

General Obligation Bonds, Series of June 2016 Year Par ($mm)* General Obligation Bonds, Series of June 2016 Financing Overview 2017 22,000,000 2018 22,000,000 Estimated Size $550,000,000* 2019 22,000,000 Use of Proceeds To provide funds to finance capital projects under the State’s capital program 2020 22,000,000 2021 22,000,000 Tax Status Tax-Exempt 2022 22,000,000 Final Maturity 2041 2023 22,000,000 2024 22,000,000 Amortization Level Principal beginning June 1, 2017, bidders have the option to designate and aggregate 2025 22,000,000 one or more maturities of the Bonds, as no more than two term bonds, as more fully 2026 22,000,000 described in the Official Notice of Bond Sale and the Official Bid Form. 2027 22,000,000 Interest Payment Dates December 1 and June 1, commencing December 1, 2016 2028 22,000,000 2029 22,000,000 Redemption Features Callable June 1, 2026 2030 22,000,000 Mode Fixed rate bonds 2031 22,000,000 2032 22,000,000 Sale Structure Competitive 2033 22,000,000 Security and Repayment Source Direct general obligation of the State; full faith and credit pledge 2034 22,000,000 2035 22,000,000 Ratings (S&P/Fitch/Moody’s) BBB+/BBB+/Baa2 2036 22,000,000 Bid Date June 16, 2016 2037 22,000,000 Closing June 29, 2016 2038 22,000,000 2039 22,000,000 2040 22,000,000 2041 22,000,000 *Preliminary, subject to change. 3

State of Illinois Financial Management Team Tim Nuding, Director of the Governor’s Office of Management and Alexis Sturm, Deputy Director for Debt, Capital and Revenue Budget • Appointed Deputy Director for Debt, Capital and Revenue in • Appointed Director of the Governor’s Office of Management and September 2015 Budget in January 2015 • 18 years of experience in State government, including 11 years as • 25 years of experience working in the State of Illinois government senior staff for the Comptroller working on fiscal policy issues and with focus on budget issues fiscal/debt reporting and over 6 years in the Governor’s budget office working on debt management and revenue issues • Most recently Chief of Staff to Illinois Senate Republicans Kelly Hutchinson, Director of Capital Markets Kim Fowler, Chief Legal Counsel • Appointed Director of Capital Markets in November 2015 • Appointed Chief Legal Counsel of the Governor’s Office of • Responsible for day-to-day operations of Illinois' debt program Management and Budget in January 2015 • Formerly a Director at a nationally ranked financial advisory firm • 25 years of experience in State government, including serving on Governor’s legal staff from 1990 - 1998 and as Illinois’ debt • Over 10 years of experience in Public finance and over 5 years of director from 1999-2002 experience in investment banking and corporate finance 4

Illinois is a State of Diversified Economic Strength • Unemployment declining along with national trends • Workforce composition mirrors that of the U.S. • Serves as a transportation hub and is home to 34 Fortune 500 • Per Capita Income remains above the national average headquarters 2015 Non-Agricultural Payroll Jobs by Industry Unemployment Rates (Not Seasonally Adjusted) 4% Trade, Transportation and Utilities 6% 11% Professional and Business Services Illinois 6% Education and Health Services Unemployment 20% 9% Government 10% Manufacturing 7% National 16% Leisure and Hospitality 10% Unemployment 5% Financial Activities 2011 2012 2013 2014 2015 14% 15% Mining, Logging, Information and Other Services Construction Source: U.S. Department of Labor, Bureau of Labor Statistics Data Source: U.S. Department of Labor, Bureau of Labor Statistics Per Capita Income Per Capita Gross Domestic Product (GDP) $50,000 $55,000 Illinois Per Illinois $47,000 Capita $50,000 Income $44,000 United States $45,000 National Per $41,000 Great Lakes Capita Income Region $38,000 $40,000 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 Source: U.S. Department of Commerce, Bureau of Economic Analysis, April 2016 Source: Bureau of Economic Analysis, current data as of May 5, 2016. 5

Current Status of FY 2016 Budget 1 • As of May 31, 2016, a full FY 2016 General Funds budget has not been enacted. • Certain appropriations were enacted and spending is occurring through statutory transfers, statutory continuing appropriations, court orders and consent decrees. Such spending includes: • General Obligation and Build Illinois bond debt service payments - State is current on all payments • Funding for elementary and secondary education • Medicaid and certain social service grant programs covered by consent decree • State employee payrolls by court order • $600 million from the Education Assistance Fund for higher education • State agencies are only submitting vouchers for payment for items covered by appropriations, continuing appropriations or court orders/consent decrees. • As of May 31, 2016 the Comptroller was holding $2.9 billion in unpaid General Funds vouchers and pending transfers. • This amount is bills on hand at the Comptroller’s office and does not include bills that the agencies are holding. • The Comptroller has estimated that approximately $4.1 billion in bills are on hold at the State agencies. 1 The State can provide no assurance that spending reductions, revenue changes or additional appropriations will be 6 passed by the General Assembly or signed into law by the Governor.