3/21/03
The Chicago Transit Authority announced the successful sale of bonds that will help the agency fund the continuing renovation of the Cermak (Douglas) Branch of the Blue Line. The CTA sold $207.2 million in Capital Grant Revenue Bonds, Series 2003A-B.
Due to strong investor demand in the bond market on the day of pricing, the CTA was able to pay low interest rates, ranging from 1.27 percent to 2.24 percent ? near historical low interest rates ? for bonds maturing from 2005 to 2008.
The CTA's Capital Grant Receipts Revenue Bonds received an A3 bond rating from Moody's Investors Service and an A- rating from Standard & Poor's which are the highest ratings for this class of debt issuance. When the bonds were sold March 11, they were insured by Ambac, leading to an AAA rating. Moody's Investors Service is a leading global credit rating, research and risk analysis firm. Standard & Poor's is a leading provider of independent research, indices and ratings.
?Receipt of these funds is very good news as the CTA moves forward with these projects. We were in the market at the right time and with the right product," said Chicago Transit Board Chairman Valerie B. Jarrett. ?My thanks to our financial team for all the time and effort they dedicated to securing these bonds and making this transaction a reality."
?The CTA has worked very hard to become a fiscally responsible agency," said CTA President Frank Kruesi. ?Our ability to successfully complete major capital projects on time and within budget is a key factor in the rating. The issuance of these bonds and their high ratings means the CTA can continue moving toward a state of good repair as we strive to provide on-time, clean, safe and friendly service."
At its March monthly meeting, the Chicago Transit Board approved the issuance of debt in support of capital projects. Pricing for the issuance of Public Building Commission bonds to fund the CTA's new corporate headquarters is expected within the next week and the transaction should be completed at the end of this month.
"The support of Mayor Richard M. Daley, the General Assembly and the leadership of the Illinois Congressional delegation, and programs such as Illinois FIRST played pivotal roles in getting the FFGA approved for the Cermak Blue Line project. Our bond rating is a direct result of that support," added Kruesi.
The renovation of the Cermak (Douglas) Branch of the Blue Line began in September 2001 and is expected to be completed in late January 2005. The $482.6 million project includes replacing five miles of track, rail ties and footwalks; rebuilding or renovating eight stations; removing and replacing 350 elevated structural spans; installing more than 700 caissons; and upgrading the signal and communications systems. All Cermak (Douglas) Branch stations will become fully accessible to customers with disabilities. Service is being maintained throughout the project.
The CTA last issued long-term capital debt in 1953 for $6.9 million. Previously revenue bonds for $22.5 million were issued in 1952. In 1947, $90.7 million in revenue bonds were issued to create the CTA and buy the assets of Chicago Surface Lines and the Chicago Rapid Transit Company.
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