 "This tobacco bond sale is one of the highest rated tobacco deals in
history," said David Vaught, director of the Office of Management
and Budget. "These funds will provide the state with needed money to
pay outstanding bills, keep people employed and provide crucial
services while continuing to restore fiscal health to the state."
The state's bonds priced with an all-in interest rate of 5.6
percent. This interest rate is 90 basis points lower than the 6.5
percent rate anticipated when the General Assembly approved the
bonds in the spring of 2010.
"I'm very pleased with the hard work and great execution provided
to the state by Citi Group, Barclay's Capital and Public Financial
Management," said John Sinsheimer, director of capital markets for
the Office of Management and Budget. "The level of demand for this
issuance exceeded expectations and allowed us to raise additional
revenues to further meet state needs."
Citigroup led the transaction as senior bookrunner, with Barclays
Capital acting as co-bookrunner. The state was advised by Public
Financial Management, which acted as financial adviser.
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The tobacco bonds are being sold through a special-purpose
corporation called the Railsplitter Tobacco Settlement Authority.
They are backed by payments from the 1998 settlement agreement
entered into by participating tobacco product manufacturers and 46
states for medical costs associated with diseases caused by tobacco
use.
Standard & Poor's rated the short-term bonds A and the long-term
bonds A-minus. S&P last rated a tobacco revenue bond A in 2001.
Fitch rated the bonds triple-B-plus, the highest possible rating the
agency assigns to tobacco bonds.
This is the state's first issuance of tobacco revenue bonds.
[Text from Office of Management and
Budget file received from
the
Illinois Office of
Communication and Information] |
