July 16--Mayor Rahm Emanuel's plan to manage the city's burdensome liabilities with more borrowing is moving forward.
The city on Wednesday sold $745 million worth of taxable bonds to more than 70 investors, Chicago finance officials said. The deal will allow the city to pay back over decades expenses such as $170 million in debt payments coming due this year and more than $40 million in bank fees driven up by the city's deteriorating credit.
Chicago is also using the bonds to postpone paying bills related to former Mayor Richard M. Daley's failed Olympics bid and his privatization of the city's parking meters, according to borrowing documents released last week.
Governments are not allowed to take advantage of cheaper tax-exempt rates when they use long-term borrowing for short-term expenditures. The federal government makes interest on bonds tax-exempt -- paving the way for governments to pay lower rates -- only when the borrowing has some long-term benefit.
The city said it expects to complete the second part of the planned $1.1 billion borrowing deal Thursday, when finance officials expect to sell $348 million in tax-exempt bonds.
hgillers@tribpub.com
