Karen's Feed
Apr 30, 2015

Illinois governor reverses $26 mln in cuts to social programs

CHICAGO, April 30 (Reuters) – Illinois Governor Bruce Rauner
on Thursday reversed $26 million in surprise spending cuts that
had forced the shutdown of a stop-smoking hotline and ended
funding for some autism programs and indigent funerals.

Officials at the governor’s office said higher-than-expected
personal income tax revenue allowed the Republican governor to
restore the grants for social services, in the budget that ends
on June 30.

Apr 29, 2015

Chicago mayor unveils initial fiscal reforms

CHICAGO (Reuters) – Chicago Mayor Rahm Emanuel revealed on Wednesday the first steps he will take over the next four years to help fix the city’s financial problems by changing some of the city’s long-used and sometimes controversial debt maneuvers.

The mayor, who won a second term in office earlier this month, said Chicago will end bond restructurings that push out debt payments to future years as well as the use of interest-rate swaps. His plan also calls for restructuring variable-rate general obligation bonds to fixed-rate mode and funding legal settlements with operating revenue instead of debt.

Apr 22, 2015

Michigan governor signs bill to aid Detroit bond sale

By Karen Pierog

(Reuters) – Michigan Governor Rick Snyder on Wednesday
signed into law a bill aimed at reducing interest rate costs for
an upcoming Detroit bond sale.

Detroit privately placed $275 million of variable-rate bonds
with Barclays Capital to finance its Dec. 10 exit from the
biggest-ever municipal bankruptcy. As part of the city’s U.S.
Bankruptcy Court-approved plan, that debt is due to be sold in
the U.S. municipal market in a fixed-rate mode by May 9. The
deal will mark the city’s first post-bankruptcy public bond
sale.

Apr 8, 2015

Insight – Emanuel’s re-election present: Chicago’s fiscal nightmare is just beginning

CHICAGO/NEW YORK (Reuters) – Rahm Emanuel may have been elected to a second term as Chicago’s mayor on Tuesday but now he faces a stark choice: inflict pain on the city’s population in the form of unpopular measures such as higher taxes or kick its problems further down the road and risk a fiscal crisis that could even lead to bankruptcy later.

While voters appear to have seen President Barack Obama’s former chief of staff as more able than labour union-backed challenger Jesus “Chuy” Garcia to deal with Chicago’s massive public pension liabilities, neither candidate squarely addressed what could be a fiscal nightmare for the city.

Apr 8, 2015

Emanuel’s re-election present: Chicago’s fiscal nightmare is just beginning

CHICAGO/NEW YORK (Reuters) – Rahm Emanuel may have been elected to a second term as Chicago’s mayor on Tuesday but now he faces a stark choice: inflict pain on the city’s population in the form of unpopular measures such as higher taxes or kick its problems further down the road and risk a fiscal crisis that could even lead to bankruptcy later.

While voters appear to have seen President Barack Obama’s former chief of staff as more able than labor union-backed challenger Jesus “Chuy” Garcia to deal with Chicago’s massive public pension liabilities, neither candidate squarely addressed what could be a fiscal nightmare for the city.

Mar 26, 2015

Divergent bond results for Chicago and Philadelphia schools

March 26 (Reuters) – Two of the nation’s most distressed
big-city school districts issued general obligation bonds this
week, with very different results.

The junk-rated Philadelphia School District borrowed at
investment-grade levels thanks to a state intercept program. But
the higher-rated Chicago Board of Education paid a whopping 4
percent over the SIFMA Index on variable rate bonds – about five
times more what it paid than two years ago.

Mar 11, 2015

Illinois, unions duel over pensions in state’s high court

SPRINGFIELD, ILL, March 11 (Reuters) – A pension reform law
passed in 2013 is necessary to protect public health and safety
and should stand despite restrictive language in the state
constitution, Illinois’ solicitor general said at a high-stakes
supreme court hearing on Wednesday.

Prohibiting reform “would tie the state’s hands when its
need to act is most pressing,” Carolyn Shapiro told the court in
an opening statement.

Mar 11, 2015

Illinois, unions to duel over pension cuts before state’s high court

CHICAGO (Reuters) – Illinois may be fighting an uphill battle on Wednesday in defending the constitutionality of a 2013 public pension reform law before the state supreme court.

Illinois justices will hear the state’s appeal of a Nov. 21 county court ruling that tossed out the law. In the ruling, Sangamon County Judge John Belz drew on an unrelated state supreme court opinion that found the Illinois Constitution makes it “plain” and “unambiguous” that pensions cannot be reduced.

Mar 10, 2015

SEC official eyes accounting mandate for municipal issuers

By Karen Pierog

(Reuters) – Issuers of municipal bonds should be required to
adhere to certain accounting standards to enhance transparency
in the $3.7 trillion U.S. muni market, U.S. Securities and
Exchange Commissioner Dan Gallagher said on Tuesday.

In a speech at a Financial Industry Regulatory Authority
conference in New York, the Republican commissioner said that
just over two-thirds of the nation’s 30,000 biggest state and
local government bond issuers incorporate practices recommended
by the Governmental Accounting Standards Board (GASB). He added
that the 20,000 remaining smaller issuers probably have a lower
rate of compliance.

Feb 27, 2015

Exclusive: Chicago rating downgrade may end swaps deals – Moody’s

CHICAGO (Reuters) – The downgrade of Chicago’s credit rating by Moody’s Investors Service on Friday could immediately terminate four interest-rate swap agreements, costing the city about $58 million, and could lead to more terminations in the city’s swaps portfolio.

Moody’s in a report noted that its downgrade of Chicago’s credit rating to Baa2 triggered termination clauses in four swaps contracts, used by Chicago to hedge interest-rate risk on its variable-rate bonds. Chicago will be required to pay $58 million penalties if it cannot reach settlement agreements with counterparties on the four swaps contracts, Moody’s noted.