CTA Removes UBS from Upcoming Pension and Healthcare Bond Issuance

June 6, 2008

The Chicago Transit Authority announced today that it has removed UBS as one of three Joint Book Running Managers for its upcoming sale of $1.9 billion of pension obligation bonds. In February of this year, the CTA assembled a diverse team of financial advisors and underwriters to guide the sale with Morgan Stanley, Loop Capital Markets and UBS as Joint Book Running Managers. However, with the recent announcement by UBS that it will shut down its Institutional Municipal Securities Group, UBS is no longer in a position to support the CTA with respect to the transaction.

The CTA has not yet decided to replace UBS and will be evaluating its options.

The Independent Financial Advisors for the bond issuance are Mesirow Financial and Peralta Garcia. The CTA's Financial Advisors are Columbia Capital and Scott Balice.

Katten Muchin serves as Bond Counsel. Burke Burns & Pinelli and Gonzalez Saggio Harlan LLP serve as Co-Bond Counsel. Underwriters' Counsel is Perkins Coie and Chapman and Cutler. Co-Underwriters Counsel are Charity & Associates and Golden and Associates. Co-Senior Managers are Goldman Sachs, Cabrera Capital Markets and Siebert Bradford Shank. Co-Managers are Citigroup; DEPFA/First Albany, Estrada.Hinojosa, Grigsby, JP Morgan, Rice Financial, Ramirez & Company and William Blair & Co.

In January, state legislation authorized the CTA to issue bonds in order to fund its pension and establish a retiree healthcare trust. The bonds will be backed by new revenues authorized in the same state legislation.

As of January 1, 2007, the Retirement Plan for CTA employees was 30 percent funded. The new state legislation requires the Pension Fund to stay above 60 percent funded through 2039, and reach 90 percent funded by 2060. It also requires creation of an independent healthcare trust to manage and provide retiree benefits.


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