CITY OF CHICAGO/SALES TAX SECURITIZATION CORPORATION WIN BOND BUYER’S DEAL OF THE YEAR AWARD

CITY OF CHICAGO/SALES TAX SECURITIZATION CORPORATION WIN BOND BUYER’S DEAL OF THE YEAR AWARD


CHICAGO – The City of Chicago was awarded the esteemed national Bond Buyer 2023 Deal of the Year award and the 2023 Deal of the Year award in the Midwest category. The City was honored for its innovative financing techniques to invest in social initiatives in the Chicago Recovery Plan, its capital investments, and the refinancing of outstanding debt, all of which generated significant debt-service savings for the City.

“This accomplishment reflects our dedication to fiscal responsibility and the vision we have for a strong economic future for our city,” said Mayor Brandon Johnson. “I am proud to celebrate this achievement with the entire team in recognition of their efforts, which show how as a collective, our administration is committed to continued improvement in City finances, which will strengthen our ability to provide for residents and communities.”

The award ceremony, which is the only national recognition for municipal bond transactions annually, took place on Tuesday, December 5, 2023, in New York City, where outstanding financial transactions across the nation were acknowledged. “This award is recognition for our dedication to utilizing innovative municipal finance techniques to drive down costs and use structures that enhance our bond rating,” City of Chicago Chief Financial Officer Jill Jaworski commented. “This was the City’s first issuance of Social Bonds, which demonstrates our commitment to fostering community development and addressing the critical needs of our residents. This transaction featured a novel sale process that engaged Chicago residents in a manner that we had never done before. Eight percent of the social bonds were placed with Chicago residents, and 24 percent with Illinois residents.”

This accolade goes beyond recognition; it signifies a considerable achievement for the City of Chicago. Municipal bond sales allow a government entity, like a municipality, to raise capital in the public markets for various purposes including infrastructure projects, public services, or debt refinancing. Bonds are debt securities that investors purchase, and in return, the issuing entity agrees to pay periodic interest and return the principal amount upon maturity.

City of Chicago Debt Manager, Brendan White, accepted the award on behalf of the City. White remarked, “Because of our commitment to financial discipline, including building up to incorporating the full annual cost of the City's pension contributions, we were able to afford to pay for these transformative social projects and use the STSC to sell high-rated bonds to retail investors for local projects.”

For municipalities like Chicago, bond deals are crucial for several reasons, including:

Capital Funding and Infrastructure Investment: Use of municipal bonds allows the City to raise significant capital for large-scale projects like building or repairing infrastructure, investing in the water and sewer systems, improving airports and public facilities.

Debt Refinancing: The City often uses bond sales to refinance existing debt, taking advantage of favorable market conditions to reduce interest costs and improve the City’s overall financial position.

Generational Equity: By financing costs through municipal bonds, we can spread the cost of projects over time, aligning expenditures with the long-term benefits of the infrastructure or services being financed.

Long-Term Financial Strategy: Bond financing is a key component of a city's financial strategy, allowing it to manage its budget, undertake strategic projects, and navigate economic challenges.

Municipal bonds are important financial instruments that enable Chicago to fund essential projects and manage finances strategically, playing a vital role in economic development and sustainability. The City of Chicago remains committed to responsible financial practices that contribute to the well-being of its residents and overall prosperity.


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