Loop Capital Markets Serves as Sole Manager on City of Chicago’s $25.2 million Special Assessment Improvement Bonds, Refunding Series 2022 (Lakeshore East Project)

On February 15, 2022, Loop Capital Markets served as sole manager on the City of Chicago’s (the “City”) $25.2 million Special Assessment Improvement Bonds, Refunding Series 2022 (Lakeshore East Project) (the “Bonds”), which was unrated. Lakeshore East is a master-planned development that began in 2002 comprising approximately 26 acres in Chicago located adjacent to Michigan Avenue and the Chicago River. The Special Assessment Area encompasses most of the development and currently consists of 17 buildable parcels with the entire project to be developed within the next 10 years.

Proceeds of the Bonds were used to (i) refund all of the City’s Special Assessment Improvement Bonds, Series 2002 (Lakeshore East Project), (ii) fund certain reserves for the Bonds, and (iii) pay costs of issuance. The Series 2002 Bonds were refinanced to achieve a lower interest cost and to release eligible reserves in an effort to further pay down a portion of the debt. The Bonds were structured to achieve uniform savings with tax-exempt par coupon bonds amortizing from December 1, 2022 to December 1, 2032 with no optional redemption feature given the short final maturity.

Immediately following the release of the Preliminary Limited Offering Memorandum (“PLOM”), the Firm’s salesforce actively began the pre-marketing process and contacted a broad range of prospective accounts within the limitations of a limited public offering, including current holders of the Series 2002 Bonds. The Firm coordinated three investor one-on-one conference calls with the City and Developer and the PLOM was viewed by 39 investors.

The Firm successfully priced the transaction during a volatile market with MMD cuts of up to six basis points across the curve. Due to strong subscription levels, spreads were tightened by 7 basis points across all maturities from pre-pricing to final pricing. The average coupon of the refunding bonds was 3.109% which was a reduction of 54% from the 6.749% average coupon of the refunded bonds. The refunding generated $6.2 million of Net Present Value savings or $1.7 million of annual savings for Lakeshore East residents.