State plans to issue $3.7 billion in bonds to fund employee pensions

[January 15, 2011]  SPRINGFIELD -- The Governor’s Office of Management and Budget of the state of Illinois has announced plans to issue $3.7 billion in taxable general obligation bonds to be deposited into the Pension Contribution Fund. The issuance of these bonds will reimburse or fund the state’s required deposit to its pension systems for fiscal 2011.

The bonds will have an eight-year final maturity, with principal payments of $100 million due in 2014, $300 million in 2015, $600 million in 2016 and $900 million due annually from 2017 through 2019.

The bonds are expected to price in mid-February. Goldman Sachs, Loop Capital and Morgan Stanley have been named as joint bookrunning senior managers. Mesirow Financial and William Blair are senior managers. Peralta Garcia Solutions will serve as the financial adviser.

The Illinois Senate passed the pension borrowing bill (SB 3514) this week. The Illinois House passed the measure in May 2010.

This is the state's second issuance of medium-term notes for its pension system.

[Text from Office of Management and Budget file received from the Illinois Office of Communication and Information]