Tag: Chicago Public Schools

Chicago school district finds buyers after offering higher yields

Mary Pat Campbell

Link: https://fixedincome.fidelity.com/ftgw/fi/FINewsArticle?id=202201141507SM______BNDBUYER_0000017e-59c7-de0b-a77f-dbef44d30001_110.1#new_tab

Excerpt:

Chicago Public Schools’ $872 million of junk-rated paper met with a more fickle high-yield audience this week, underscoring the district?s vulnerability to market volatility even as it inches closer to investment grade status.

At attractive spreads that offered a healthy yield kick with many maturities offering 4% coupons, the bonds were 2.2 times oversubscribed, CPS said in a statement. More than 40 institutional investors placed orders including some in excess of $150 million each.

The district will pay a true interest cost of 3.51% that ranks among the lowest paid by the Chicago Board of Education over the last two decades. The sale provides $500 million of new money for capital projects and the remainder refunds 2011 bonds.

Author(s): Yvette Shields

Publication Date: 14 Jan 2022

Publication Site: Fidelity Fixed Income

Chicago Public Schools’ yield penalties hit fresh low

Mary Pat Campbell

Link: https://fixedincome.fidelity.com/ftgw/fi/FINewsArticle?id=202101291341SM______BNDBUYER_00000177-4f21-d760-a9ff-4ffdc0490002_110.1#new_tab

Excerpt:

Investors on the hunt for yield with few pickings scooped up Chicago Public Schools? junk paper Wednesday driving down the district?s yield penalties paid in the primary market to their lowest in years.

The 10-year in the $560 million sale that marked the Chicago Board of Education?s first COVID-19 era sale settled at a yield of 1.94%, a 117 basis point spread to the Municipal Market Data?s AAA benchmark.

The BBB benchmark was at an 89 basis point spread Thursday. The new-money and refunding bonds carried one investment grade rating and two speculative grade ones and while high yield investors snapped up the paper, Alliance Bernstein?s high impact social fund shunned the transaction. The fund said the district has failed to provide sufficient evidence it?s protecting students from in-school sexual misconduct in the aftermath of a scandal that drew a rebuke from the U.S. Department of Education.

Author: Yvette Shields

Publication Date: 29 January 2021

Publication Site: Fidelity Fixed Income

Chicago Public Schools tees up first pandemic-era bond deal

Mary Pat Campbell

Link: https://fixedincome.fidelity.com/ftgw/fi/FINewsArticle?id=202101251653SM______BNDBUYER_00000177-3b58-d624-adf7-ff7a48da0001_110.1

Excerpt:

Chicago’s school district is heading into the market for its first COVID-19 era deal with a balance sheet shored up by federal relief.

The district is selling this week $560 million of tax-exempt, dedicated revenue-backed general obligation paper that carries two junk ratings and one at investment grade.

The deal offers $450 million of new money to finance capital work and $110 million of bonds that will refund 2006, 2009 and 2010 debt for savings with no extension of the original maturity. State aid is the pledged dedicated revenue on both pieces with other intergovernmental agreement-related revenue also pledged on the new money series.

Author: Yvette Shields

Publication Date: 25 January 2021

Publication Site: Fidelity Fixed Income

Original Publisher: Bond Buyer