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Old 03-16-2014, 11:34 AM
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Mary Pat Campbell
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Join Date: Nov 2003
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http://mobile.reuters.com/article/id...40313?irpc=932

Quote:
CHICAGO, March 13 (Reuters) - Investors flocked to Chicago's $883 million bond sale this week, though the city paid a higher price to borrow than at its last general obligation offering in 2012.

The sale, which also included taxable bonds, was Chicago's first GO offering since Fitch Ratings and Moody's Investors Service downgraded its credit last year, mostly on concern about the city's underfunded public pensions.

Moody's was active as recently as last week, cutting Chicago's rating one notch to Baa1.

New tax-exempt bonds due in 2036 priced at 161 basis points over comparable maturity top-rated bonds on Municipal Market Data's benchmark yield scale. In the city's 2012 sale, the spread for comparable Chicago bonds was 89 basis points over the scale, according to MMD, a unit of Thomson Reuters.

The deal, which priced on Wednesday through Wells Fargo, attracted $3.65 billion in orders from institutional investors, including dozens that had not bought the city's bonds before, Lois Scott, Chicago's chief financial officer, said on Thursday.

She said investors were increasingly relying on their own credit research and less on rating agencies.

I highly doubt they think Chicago is more creditworthy than Moody's is pegging it.

I think they're deliberately taking on credit risk.
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