CHICAGO -- The Cook County, Ill., Board of Commissioners approved on Friday the issuance of approximately $209 million of new general obligation debt and the refunding of up to $250 million of outstanding GO debt.
Phillip Peloquin, executive vice president of Public Sector Group, a private firm that serves as the county's financial adviser, said the new GO debt will probably be priced around Sept. 15 in a deal headed by Kemper Securities Inc.
The issuance of the bonds will mark the second phase of the county's four-year, $958 million debt plan for capital projects. In April, the county sold the first phase of about $200 million of GO bonds for building and improving correctional facilities. Proceeds from the second issue will be used to continue those projects and others related to health-care services, according to county officials.
The debt refunding could be priced around Sept. 29 in a deal headed by Bear, Stearns & Co., according to Woods Bowman, the county's chief financial officer.
Mr. Peloquin pointed out that the timing for the refunding will depend on the interest rate environment. Candidates for the refunding, he added, include bonds issued in 1983, 1985, and from 1988 through this year.
The savings from the refunding will not be applied to the county's current fiscal year budget, but will be used to decrease debt service payments, according to Mr. Peloquin.
Mr. Bowman said the county hope to save about $10 million.
The refunding and the new debt were included in a bonding schedule advanced in July by Mr. Bowman for the remainder of the year.
That schedule also calls for the issuance of $40 million of GO bonds by the Cook County Forest Preserve district for zoo renovations and land acquisition. In addition, the schedule involves the restructuring of $10 million to $35 million of the $280 million of single-family mortgage revenue bonds the county issued from 1982 to 1985.
Mr. Peloquin said the county board will be asked for final approval of those two issues in October.
Last month, the county board approved an underwriting team led by Bear Stearns for the forest preserve issue. The board deferred action, however, on selecting a team led by George K. Baum & Co. for the housing debt restructuring until more information is made available on its mechanics.
The county's GO debt is rated A-plus by Fitch Investors Service Inc. and A1 by Moody's Investors Service. Mr. Bowman said the county, for the first time, will seek a rating from Standard & Poor's Corp. on the new GO and refunding bond issues.
"It's pretty common for large governments to get three ratings," Mr. Bowman said. "So we're just doing what the industry standard is."