CHICAGO -- The Cook County, Ill., Board of Commissioners yesterday approved a $272.5 million general obligation bond issue -- the largest single bond issue in the history of the county.
In addition, the county for the first time was rated by Fitch Investors Service, which assigned an A-plus rating to the issue. On Friday, Moody's Investors Service affirmed the county's A1 GO rating for the upcoming bond issue.
Underwriters for the deal said the bonds would be priced Wednesday. The county board had given preliminary approval to explore issuing bonds and had approved a financing team on June 17.
The bond issue will involve the refunding of $128 million of tender notes due Sept. 11, an advance refunding of $30 million of 1983 bonds, and the issuance of $80 million of new bonds for various construction projects.
County officials said the county would save $24 million over the life of the 30-year bond issue -- which includes $102 million of serial bonds, $148.8 million of term bonds, and $21.7 million of capital appreciation zero coupon bonds -- due to current low interest rates.
Mark Florian, a vice president at Goldman, Sachs & Co., the senior manager on the deal, said the county had not yet decided whether it would seek insurance from AMBAC Indemnity Corp. for the deal.
Mr. Florian said the county decided to seek a second rating for marketing purposes due to the size of the issue.
"The county is going to have a lot of financings to do in the future and it's good to develop a relationship with a second agency," he added.
In its preliminary official statement dated July 31, the county listed the future financing of construction projects through the end of 1993 that are estimated to cost $666.1 million.
Jack Simmons, a vice president at First Chicago Capital Markets Inc. and the county's financial adviser, said Cook County officials have not made a determination on whether to use GO tender notes or bonds for the financings. A capital improvement plan, approved by the board in 1987, called for tender notes to fund $460 million of projects. Under that program, once the projects are completed the county would issue bonds to retire the notes.
However, in his remarks in favor of the $272.5 million bond issue, County Board President Richard Phelan appeared to lean toward using bonds more.
He compared tender notes to a credit card. "We're getting off the Visa card and onto a home equity loan so we'll pay off the [facilities] as we use them," he said. "Now we'll bite the bullet and pay up front."
Co-managers on the deal are Bear, Stearns, & Co.; Prudential Securities; Brooks Securities; Dean Witter Reynolds; Gardner, Rich & Company; Grigsby Brandford Powell Inc.; and Rodman & Renshaw Inc.