Chicago Illinois Board of Education

CUSIP: 167505PA8

NAME: Chicago Illinois Board of Education

COUPON: 5.00%

MATURITY: 12/1/2041

BONDHOLDER SECURITY: The Bonds are secured by Chicago Public School’s state aid revenue and to the extent that that is insufficient, by its unlimited tax GO pledge levied against all of the taxable property in the school district, the boundaries of which are coterminous with the boundaries of the City of Chicago.

USE OF BOND PROCEEDS: Pay for the CPS’s Capital Improvement Programs, and to pay costs of issuance.

RATINGS: B3 (Moody’s)

OBLIGOR PROFILE: Chicago Board of Education is the third largest public school system in the US. As a municipality it is not permitted to file Chapter 9 in the State of Illinois. Chicago Board of Education is coterminous with the boundaries and economy of the City of Chicago. Credit weaknesses, include,  but are not limited to; concerns regarding  liquidity, structural budget imbalance, and pension liabilities. The Chicago teachers Union and Chicago Board of Education have recently agreed to a new contract that addresses, among other thing, pension contributions, etc. Chicago public school system is dependent on state funds for its pension payment as well. A new property tax levy by the Board has rendered $250 million in additional revenues as the District continues to make expenditure cuts in its effort to produce a structurally balanced budget.

 

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