Karen's Feed
May 29, 2015

Illinois governor: Will not sign unbalanced state budget

CHICAGO, May 29 (Reuters) – Illinois Governor Bruce Rauner
said on Friday that he will reject a fiscal 2016 budget from the
Democratic-controlled legislature if it is not balanced.

While the Republican expressed optimism that Democrats were
now willing to negotiate his so-called turnaround agenda, his
office later lashed out at Democratic House Speaker Michael
Madigan for declining to compromise.

May 27, 2015

Big demand slices yields for $674 mln of Chicago bonds

CHICAGO, May 27 (Reuters) – Strong investor demand pushed
yields lower for $674 million of Chicago bonds priced on
Wednesday, but the city continued to pay a penalty for its shaky
finances.

Carole Brown, Chicago’s CFO, said the four bond issues
attracted $6 billion in orders.

May 27, 2015

U.S. state April income tax revenue returns to growth

May 27 (Reuters) – U.S. state personal income taxes
rebounded in the key revenue month of April, partly due to
2014′s strong stock market, after dropping a year ago, but
collections have not fully stabilized since big increases in
2013.

The tax on earnings and investment income is a top revenue
source for the 43 states that collect it and April is their most
important revenue month because of tax filing deadlines and the
tendency to procrastinate by taxpayers owing money.

May 21, 2015

Banks give Chicago breathing room to convert bonds

CHICAGO, May 21 (Reuters) – Banks that entered into credit
and other deals related to variable-rate debt sold by the city
of Chicago have agreed not to immediately demand $2.2 billion in
payments triggered when the city’s rating was cut to junk by
Moody’s Investors Service, according to city documents.

Under new forbearance agreements with banks, the city has
until June 8 to convert $805.7 million of general obligation,
variable-rate debt into fixed-rate bonds, according to the
amended bond documents posted on Thursday.

May 21, 2015

Chicago lays out alternatives to ease looming pension payment

CHICAGO (Reuters) – Chicago could reduce a looming $550
million hike in contributions to its police and fire retirement
systems due next year by extending the deadline for reaching a
90-percent funded level, the city disclosed in bond documents on
Thursday.

The city laid out options for dealing with the payment in
documents relating to its plan to convert about $805 million of
variable-rate debt into fixed-rate bonds to avoid accelerated
debt payments and termination fees to banks.

May 20, 2015

Illinois Republicans offer help for Chicago pension woes

CHICAGO (Reuters) – Illinois’ Republican legislative leaders
said on Tuesday that lawmakers in their party want to help
Chicago address a looming $550 million pension payment increase
in the waning days of the legislative session.

“We’d like to be partners in trying to fix that situation
as well,” Senate Republican Leader Christine Radogno said at a
news conference at the state capitol in Springfield aimed at
pushing Democrats who control the House and Senate to negotiate
ways to reform and balance the state’s ailing budget.

May 15, 2015

Banks giving Chicago time, while state bankruptcy bill takes shape

CHICAGO (Reuters) – Major banks that are party to Chicago credit agreements are giving the city time, despite their right to demand $2.2 billion in immediate payments after Moody’s Investor Service this week downgraded Chicago’s rating to junk.

“At this time, the city has not been informed that the counterparties intend to accelerate payments and termination fees, and we are working with our counterparties to address any issues raised by Moody’s decision,” a city source said.

May 13, 2015

Court fight revs up over legality of Chicago pension reforms

CHICAGO (Reuters) – Chicago began an uphill battle in court
on Wednesday to keep its cost-saving pension reform law from
meeting the same fate as an Illinois law that was declared
unconstitutional last week by the state supreme court.

The city is trying to salvage a 2014 law aimed at stopping
two of its four retirement systems from running out of money. It
is also dealing with the aftermath of Tuesday’s credit rating
downgrade to “junk” by Moody’s Investors Service.

May 12, 2015

Moody’s drops Chicago’s credit rating to ‘junk’

CHICAGO, May 12 (Reuters) – Moody’s Investors Service on
Tuesday pushed Chicago’s credit rating into the “junk” category,
citing limited options for easing the city’s growing unfunded
pension liability after a state court last week invalidated a
state pension reform law.

The downgrade of Chicago’s $8.1 billion of general
obligation bonds moves the city’s rating down two notches, to
Ba1 from Baa2 with a negative outlook. Combined with rating cuts
for city revenue debt, Moody’s said, its actions could trigger
up to $2.2 billion in accelerated payments on some of that debt.

May 12, 2015

Detroit delays bond sale related to bankruptcy exit

By Karen Pierog

(Reuters) – Detroit’s public sale of $275 million of bonds
that financed the city’s exit from bankruptcy has been delayed
but should take place no later than early August, a city
official said on Monday.

Detroit is taking advantage of a new law that should give
the bonds investment-grade ratings that could save the city
between $20 million and $30 million over the life of the issue,
according to the office of Michigan Governor Rick Snyder, a
Republican.