State of Illinois Investor Presentation – Competitive Offering General Obligation Bonds, Series of May 2018 April 13, 2018 0
Disclaimer This investor presentation that you are about to view is provided as of April 13, 2018, for a proposed offering of the State of Illinois’ (the “State”) General Obligation Bonds, Series of May 2018 (the “Bonds”) . This presentation has been prepared for information purposes only and for your sole and exclusive use in connection with the proposed transaction. The information contained herein is subject to completion and amendment. Any offer or solicitation with respect to the Bonds will be made by means of a final official statement. If you are viewing this investor presentation after the date stated above, events may have occurred subsequent to that date that have a material adverse effect on the financial information presented. This presentation does not constitute nor does it form part of an offer to sell or purchase, or the solicitation of an offer to sell or purchase, any securities or an offer or recommendation to enter into any transaction described herein nor does this presentation constitute an offer, commitment or obligation on the part of the issuer to provide, issue, arrange or underwrite any financing or enter into any other transaction. You will be responsible for making your own independent investigation and appraisal of the risks, benefits, appropriateness and suitability of the proposed transaction and any other transactions contemplated by this presentation and the issuer does not make any recommendation (personal or otherwise) or giving any investment advice and will have no liability with respect thereto. The issuer does not make a representation or warranty as to the (i) accuracy, adequacy or completeness of any information in this investor presentation or (ii) legal, tax or accounting treatment of any purchase of Bonds by you or any other effects such purchase may have on you and your affiliates. This investor presentation contains “forward - looking” statements that involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, the results may differ materially from those expressed or implied by such forward-looking statements. Accordingly, we caution you not to place undue reliance on these statements. All statements other than the statements of historical fact could be deemed forward-looking. All opinions, estimates, projections, forecasts and valuations are preliminary, indicative and are subject to change without notice. THE PRINTING, DUPLICATING, DOWNLOADING, SCREEN CAPTURING, ELECTRONIC STORING, RECORDING, PUBLISHING OR DISTRIBUTING OF THIS INVESTOR PRESENTATION IN ANY MANNER IS STRICTLY PROHIBITED. By viewing this investor presentation you acknowledge that you understand and agree to the provisions of this page. Link 1 to the Preliminary Official Statement (“POS”) : [http://munios.com/e/3CY3J]. This investor presentation does not constitute a part of the POS. 1. Link expires on April 25, 2018 1 Disclaimer
Presentation Participants State of Illinois Governor’s Office of Management and Budget Hans Zigmund, Director Kelly Hutchinson, Director of Capital Markets Jim Foys, Chief of Staff Robert Steere, General Counsel Charlie Weikel, Deputy Director Co-Bond Counsel Chapman and Cutler LLP Pugh, Jones, & Johnson, P.C. Financial Advisors Adela Cepeda, Managing Director Alford Evans, Director 2 Introduction
State of Illinois Management Team Hanz Zigmund, Director Robert Steere, General Counsel Appointed Director of GOMB in January 2018 13 years of state government experience • • Prior to his current position, Hans served as Director of Appointed to GOMB as General Counsel in October 2017 • • Economic Policy in the Governor’s Office Past State positions include: Counsel to Governor James • Served for 4 years as Chief Economist at the Department R. Thompson, General Counsel to the Bureau of the • of Revenue; and for 2 years as Associate Director of GOMB Budget, General Counsel and Assistant Director of the Department of Revenue, and Inspector General for State Prior to joining GOMB, he was an Economist at the • Treasurer Judy Baar Topinka Department of Revenue for 5 years Charlie Weikel, Deputy Director Taught economics, statistics and public finance at • Roosevelt University where he also earned his Masters Appointed to GOMB as a Deputy Director in November • degree in economics 2017 Jim Foys, Chief of Staff Responsible for matters involving public pensions, • Medicaid, transportation and capital development Appointed Chief of Staff for GOMB in December 2017 • programs Almost 20 years of state government experience • Previously worked at the Office of the Governor for 3 • Worked at GOMB for 2 years, where he served as Deputy years as Deputy Director covering a variety of policy • Director of the Healthcare, Transportation and Regulatory matters including pension policy and agency operations. agencies Prior to his service in Illinois government, worked as a • Worked on the Illinois Senate Republican Staff for 16 Management Consultant in Chicago • years, where he served as Senate Staff Analyst and Deputy Director of Appropriations Kelly Hutchinson, Director of Capital Markets Appointed Director of Capital Markets in November 2015 • Responsible for day-to-day operations of Illinois' debt • program Formerly a Director at a nationally ranked financial • advisory firm Almost 20 years of Capital Markets experience in Public • Finance and Corporate Finance, including investment banking 3 Introduction
Transaction Overview The State is selling the $500 million Series of May 2018 A & B Bonds on a competitive basis General Obligation Bonds, Series of May 2018AB Preliminary Amortization Series A: 450,000,000 Maturity Series A Series B Estimated Size (May 1 st ) Series B: 50,000,000 2019 $ 18,000,000 $ 5,000,000 Competitive Method of Sale 2020 18,000,000 5,000,000 The Series 2018A Bonds are being issued to provide 2021 18,000,000 5,000,000 funds to finance capital projects under the State’s capital program and to pay costs of issuance of the 2022 18,000,000 5,000,000 Series 2018A Bonds. The Series 2018B Bonds are Use of Proceeds 2023 18,000,000 5,000,000 being issued to finance information technology 2024 18,000,000 5,000,000 projects and to pay costs of issuance of the Series 2018B Bonds. 2025 18,000,000 5,000,000 2026 18,000,000 5,000,000 Federally Tax-Exempt, State of Illinois Taxable Tax Status 2027 18,000,000 5,000,000 Fixed Rate Coupon 2028 18,000,000 5,000,000 Level Principal for both series beginning May 1, 2029 18,000,000 - 2019, bidders have the option to designate and 2030 18,000,000 - aggregate one or more maturities of a series of the Amortization 2031 18,000,000 - Bonds as term bonds, as more fully described in the Official Notice of Bond Sale and the Official Bid 2032 18,000,000 - Form 2033 18,000,000 - May 1 and November 1, commencing November 1, 2034 18,000,000 - Interest Payment Dates 2018 2035 18,000,000 - 2036 18,000,000 - 10-Year Par Call (Series A), Non call (Series B) Redemption Features 2037 18,000,000 - Direct, full faith and credit general obligations of 2038 18,000,000 - the State pursuant to the General Obligation Bond Security and Act (the “Bond Act”). The provisions of the Bond Act 2039 18,000,000 - are irrepealable until all bonds issued under the Repayment Source 2040 18,000,000 - Bond Act, including the Bonds, are paid in full as to both principal and interest 2041 18,000,000 - 2042 18,000,000 - Ratings Baa3 (Negative) / BBB- (Stable) / BBB (Negative) 2043 18,000,000 - (Moody’s/ S&P /Fitch) Total $450,000,000 $50,000,000 Sale Date April 25, 2018 May 9, 2018 Closing Date PFM Financial Advisors LLC Financial Advisor 4 Introduction
1. Illinois’ Strong and Diverse Economy 5
The State’s Credit Fundamentals are Improving The State’s outstanding bills have been reduced substantially using the proceeds from the $6.0 billion of general obligation bonds issued in 2017 and $2.2 billion of additional federal funds received upon payment of Medicaid bills By the end of FY18, the State estimates the bill backlog will be approximately $7.7 billion, or just above the bill backlog average from December 2010 to fiscal year end 2015 of $7.1 billion Recent Developments Passage of FY18 Budget Increased projected revenues Passage of legislation that remedied education funding disparities and provided certainty of funding to school districts Reauthorization of Edge Tax Credits to allow the State to compete for major economic development projects Reduced risk to swap counterparties by renegotiating rating triggers Inherent Credit Strengths Sovereign State with significant revenue flexibility Illinois’ economy is the 5 th largest in the United States and 19 th largest worldwide 1 The Bond Act constitutes an irrevocable continuing appropriation for all debt service payments on GO Bonds After FY19 pension bonds debt service declines by approx. $1 billion, providing significant financial flexibility Note: Amounts related to the plan of finance and bill backlog are estimates 1. Source: US Department of Commerce Bureau of Economic Analysis for the Illinois ranking. IMF and World Bank for the international ranking 6 Illinois’ Strong and Diverse Economy
Recommend
More recommend
