January 14, 2016

Dear Members of the Authority:

As we look back over calendar year 2015, the Members and the staff have much to be proud of.

The Authority continues to deliver positive economic impact to the people of Illinois far beyond its size (15 volunteer board members; 14 staff; Fiscal Year 2016 budget less than $5 million).

In 2015, the Authority helped grow the Illinois economy by issuing federally tax-exempt conduit bonds. Conduit bonds, by necessity, must provide material economic benefit to borrowers. This past calendar year, the Authority issued bonds mainly for 501(c)(3) non-profit organizations. The Authority recognizes that there are other qualified conduit borrowers and projects under the federal tax code. The Authority remains committed to these projects and borrowers, including farmers and mid-sized manufacturers. The Authority remains among the top issuers of conduit bonds nationally both in terms of dollar volume and the number of projects financed.

Highlights of the Authority’s calendar year 2015 accomplishments follow:

The Authority Grows the Illinois Economy through Federally Tax-Exempt Conduit Bonds

  • 50 conduit bond projects closed totaling $2.986 billion
    • Nearly $1.9 billion in 14 hospital projects
    • Nearly $775 million in 10 education projects
    • Over $167 million in 5 cultural and general 501 (c)(3) projects
    • Over $142 million in 4 senior living projects
    • Over $4.5 million purchasing nearly 1200 acres on behalf of 16 new farmers
  • $977 million in “new money” projects for 39 projects (generally construction and/or real estate purchase)
  • Over $2 billion in bonds refunded: 20 borrowers saved substantial sums of money over the life of the bonds; several of these projects also included “new money” issuance
  • Projects reflecting particular impact or innovation include:
    • New hospital and senior living construction, acquisition, and expansion across Illinois
    • Innovative professional student loan and government finance projects
    • Multiple K-12, higher education, and student housing projects in Northeast Illinois

The Authority uses its Tools to Innovate during Challenging Times

  • During the current budget impasse, the Authority helped by:
    • Providing an Authority loan to ensure payment of State moral obligation-backed bonds of another issuer, thus avoiding an unnecessary State credit downgrade
    • Purchasing, with Authority funds, over $2.25 million in other State agency receivables to ensure continued provision of essential State government goods and services
  • Funded medical school loans to DACA (Deferred Action for Childhood Arrivals) in exchange for service in medically underserved Illinois communities

The Authority Continues to Transform and Improve

  • Welcomed Rob Funderburg as the new Chair along with seven other new board members
  • Revitalized the Authority’s committee structure
  • Completed relocation of primary office to permanent, lower-cost space
  • Government Finance Officers Association recognized the Authority for excellence in financial reporting for FY 2014
  • The Authority operates on a business model, faces competition, and does not rely on State taxpayer appropriations to support its operations. Importantly, the Authority operated profitably, without taxpayer dollars, in Fiscal Year 2015 and on track to do the same in Fiscal Year 2016

Calendar Year 2016 Begins with Projects with Impact!

As part of the January 2016 agenda, the Authority is pleased to highlight two projects with particular impact: CenterPoint Joliet Terminal Railroad, LLC (“CenterPoint Project”) and Christian Homes, Inc.

CenterPoint adds to financings completed in 2010 and 2012 to finance the acquisition of land and construction of various capital improvements at the CenterPoint Intermodal Center in Joliet, a rail-to-truck and truck-to-rail intermodal facility. This month’s agenda features a new $100 million project to finance additional build-out at the Joliet Intermodal Center, which remains the only intermodal facility financed to date under the U.S. Department of Transportation’s Private Activity Bond program (which was created under the 2005 Surface Transportation Act). All other US DOT Private Activity Bond projects issued to date have financed privately-owned toll road, toll bridge, or commuter rail projects. CenterPoint’s Joliet Intermodal Center has and will continue to create thousands of construction and permanent jobs over its development cycle.

Using the Authority’s statutory multi-state issuance powers, the Christian Homes, Inc. project will save the borrower money over the life of the bonds. Importantly, from a competitive perspective, the 2016 Christian Homes conduit bonds to be issued by the Authority would refinance debt for projects located in Illinois and Indiana.

Welcome New Member Lyle McCoy

In December 2015, Governor Bruce Rauner appointed Lyle McCoy to the Authority. Until October 2015, Mr. Lyle McCoy served as the Managing Director and Head of Public Finance & Infrastructure at Bank of Montreal and BMO Capital Markets Corp. Mr. McCoy is a 27-year corporate finance industry veteran. We look forward to working with Mr. McCoy.

Thank you Mayor Barrett Pedersen

It is with deep appreciation that we say good-bye and thank you to Franklin Park Mayor Barrett Pedersen. Mayor Pedersen brought his local government perspective as well as common sense to his State volunteer public service with the Authority. On behalf of the Authority Members and staff, we thank Mayor Pedersen for his service.

I look forward to continuing to work with you in support of jobs and financing capital expansion projects throughout our state.

Respectfully,

Christopher B. Meister
Executive Director