Illinois sells $480 million in bonds after 20 month hiatus

 

CHICAGO | By Karen Pierog

 

CHICAGO Illinois sold $480 million of bonds on Thursday, its first debt issue in nearly two years, with the U.S. municipal market's hunger for higher-yielding assets easing the interest penalty the state is paying for its fiscal woes.

The deal marks the first debt issuance under Republican Governor Bruce Rauner, who took office a year ago and is embroiled in a battle with Democrats in control of the legislature. The impasse has left the fifth-largest state without a budget six months into fiscal 2016.

Illinois' enormous $111 billion unfunded pension liability and chronic structural budget deficit have driven up yields for its debt, making it more expensive for the state to borrow.

ADVERTISING

However, the state benefited with the newest issuance because the overall prevailing yields in the market have been relatively low.

"Market yields are lower, driving investors out for additional yield and Illinois offers them the opportunity to do that," said Domenic Vonella, head of U.S. municipal bonds at Municipal Market Data (MMD).

Dan Heckman, senior fixed-income strategist at US Bank, said Illinois also benefited from low supplies of new bonds.

"Illinois picked a very good time to come to market," he said.

The sale attracted nine bids. Its proceeds will be used mainly to finance transportation projects.

"The sale shows that there continues to be a lot of investor interest in our bonds despite the Democratic legislature’s failure to pass a balanced budget," Rauner spokeswoman Catherine Kelly said.

Bank of America Merrill Lynch won the general obligation bonds with a competitive bid that resulted in an overall interest cost of 3.9989 percent for the state. The deal is structured with maturities between 2017 and 2041, with bonds in four maturities insured.

Yields in the issue topped out at 4.27 percent in 2041 with a 5 percent coupon, which is 161 basis points more than the 2.66 percent yield an AAA-rated issuer's bonds would fetch in the U.S. municipal market, according to MMD's benchmark scale.

Illinois has the lowest credit ratings and the widest so-called credit spread among the 50 states. The 161-basis-point spread over MMD's scale is down from Illinois' 170-basis-point spread in the secondary muni market heading into the bond sale. But the spread is wider than the 111 basis point spread for 25-year bonds in Illinois last sale in 2014.

Credit rating agencies warned last month that Illinois' ratings, which are just three to four steps above the "junk" level, could be downgraded if the state fails to enact measures to address its fiscal problems.

ABOVE IS FROM:  http://www.reuters.com/article/us-illinois-bonds-idUSKCN0US2AV20160114

Fraternite of Notre Dame sues McHenry County Board over Marengo permit rejection

 

 

 

 

Fraternite of Notre Dame sues McHenry County Board over Marengo permit rejection

Published: Tuesday, Dec. 22, 2015 11:08 p.m. CST • Updated: Tuesday, Dec. 22, 2015 11:09 p.m. CST

Matthew Apgar - mapgar@shawmedia.com Nuns with the Fraternite of Notre Dame sit silently inside a McHenry County Board meeting on Tuesday, September 15, 2015 at the McHenry County Administration Building. The congregation was hoping to pass a conditional use only or a variation only zoning petition for the building of a gift shop, a winery, and a nursing home, but was met with 20 votes for no with only three votes in favor. Neither motion passed, which resulted in a large eruption of applause from residents opposed to the petitions.

By KEVIN P. CRAVER - kcraver@shawmedia.com

MARENGO – A French Christian order denied a permit to expand operations on its rural McHenry County property has filed a federal lawsuit to get the County Board’s rejection overturned.

The Fraternite of Notre Dame earlier this month filed a six-count lawsuit alleging that the County Board discriminated against it as a religious institution when it voted in September against granting it a permit to add a boarding school, nursing home, winery, brewery and gift shop to its 95 acres at 10002 Harmony Hill Road, south of Marengo and Union.

The lawsuit alleges that the board’s decision, based in large part on the conclusion that the proposed use is an inappropriate fit for a rural agricultural area, is discriminatory because the board has granted permission to build for other uses. It singles out the nearby Marengo Ridge Golf Course, the county-owned Valley Hi Nursing Home west of Woodstock, as well as two public schools, a private Lutheran school, and several churches with gift shops.

“You can’t say no to [the Fraternite] when you’ve said yes to everyone else,” Fraternite attorney Jim Geoly said.

The County Board first granted the Fraternite a permit in 2005 to build a chapel, convent, monastery and bakery on the property. Neighbors have alleged the Fraternite has not been a good neighbor when it comes to work hours and construction, and have argued that adding a school, hospice and brewery would make the property a worse fit for the rural area.

More than 800 people signed a petition opposing the expansion, and the Coral Township Board opposed it as well.

The Fraternite’s request after months of testimony passed the Zoning Board of Appeals on a 4-3 vote, which was one vote shy of the five needed for a recommendation to approve. It then went on to the County Board, which soundly rejected the request on a 20-3 vote. While board members praised the Fraternite and its work helping the poor and downtrodden, they concluded the expansion request was inconsistent with the county’s land-use plan and development ordinances.

However, the lawsuit states the County Board had granted such permits for similar uses in similar areas, and alleges that the rejection of the Fraternite’s permit violates the equal protection clauses of the U.S. and Illinois Constitutions, as well as the federal Religious Land Use and Institutionalized Persons Act and the state Religious Freedom Restoration Act.

The lawsuit asks the federal court to rule that the Fraternite can build its requested expansion with the variances to size and height it had requested, and compensate it for attorney’s fees.

Bad blood between the Fraternite and the neighbors have simmered in the decade since the retreat was first built. Neighbors have chafed at allegations of religious and racial bigotry by the Fraternite and its supporters – most of the order’s works are done in the Austin neighborhood of Chicago. And the Fraternite has been the victim of vandalism in past years, most notably in 2005 when its statues of Jesus and Mary were defaced with spray paint.

Fraternite of Notre Dame was founded in 1977 by French Bishop Jean Marie, who claims he received divine inspiration from the Virgin Mary to help the disadvantaged. The order identifies as Catholic, but is not recognized by the Vatican.

ABOVE IS FROM:  http://www.nwherald.com/2015/12/22/fraternite-of-notre-dame-sues-mchenry-county-board-over-marengo-permit-rejection/a3ageqp/

BCJ: Letter to Editor regarding Michelle Courier

 

BCJ: Dist 100 Names New Superintendent

Ted Cruz's Citizenship Status Challenged In Birther Lawsuit

 

Here we go...

01/15/2016 12:03 pm ET

• Nick Visser Reporter, The Huffington Post

Scott Olson/Getty Images

A lawyer in Texas has filed suit challenging Ted Cruz's run for president.

A new lawsuit claims Sen. Ted Cruz (R-Texas) is ineligible to run for president, citing his Canadian birth.

The case, lodged Thursday by Texas attorney Newton B. Schwartz Sr., says Cruz is ineligible to run as he isn't a "natural born citizen," Bloomberg reported. Cruz was born in Canada to an American citizen.

“This 229-year question has never been pled, presented to or finally decided by or resolved by the U.S. Supreme Court,” Schwartz says in his complaint.

Schwartz has requested the U.S. Supreme Court expedite the case ahead of the Iowa caucuses and told Bloomberg he was surprised Cruz didn't file a case himself to avoid any complications.

The issue became heated during this week's GOP debate after a moderator asked Cruz about Donald Trump's accusations that the senator may be constitutionally prohibited from presidential office.

"Back in September, my friend Donald said he had his lawyers look at this from every which way and there was no issue there," Cruz replied. "There was nothing to this birther issue. Now, since September, the Constitution hasn't changed, but the poll numbers have."

A similar debate took place nearly 50 years ago over the eligibility of George Romney, former Michigan governor and father of Mitt Romney, to run for president. George Romney was also born to U.S. citizens living outside the country. Mitt Romney recently tweeted in support of Cruz, citing his father's case.

There may be no more infamous birther controversy than the one that dogged President Barack Obama, who was actually forced to release his birth certificate to shut down rumors he was born outside the United States. Trump has been one of the most vocal doubters of Obama's birthplace.

ABOVE IS FROM:  http://www.huffingtonpost.com/entry/ted-cruz-birthplace_56988b8ee4b0778f46f8ef55?

How Ted Cruz fixes the Goldman Sachs loan scandal

 

By Rick Newman 20 hours ago

 



There’s nothing wrong with a candidate taking bank loans to help finance his campaign, as Ted Cruz did when he first ran for the Senate in Texas in 2012. But failing to report those loans, as Cruz acknowledged doing after the New York Times uncovered the loans, is illegal.

Not going-to-jail illegal, however. The Federal Election Commission, which enforces campaign-finance laws, is generally viewed as one of the weakest regulatory agencies in Washington, reluctant to press violators too hard—especially members of Congress who must approve its budget every year. A Cruz spokeswoman has already said the failure to disclose was "inadvertent," and the candidate will update the necessary reports. But the FEC may still investigate and fine Cruz for the error. If Cruz wants to wrap up the loan controversy quickly, he'll acquiesce to the FEC's demands.

But that depends on Cruz’s willingness to bow before a federal agency, and Cruz is notoriously hostile toward government authority. So it’s possible Cruz could fight any FEC enforcement effort, prolonging the controversy. “If he’s smart, he’ll start amending these reports immediately and say it was a misunderstanding,” says Larry Noble of the nonprofit Campaign Legal Center. “But it could get complicated.”

Cruz, according to the Times, took loans totaling about $1 million from two Wall Street banks: Goldman Sachs (GS) and Citibank (C). The Goldman loan is a particular eyebrow-raiser because Cruz’s wife, Heidi Cruz, is a Goldman executive (who’s on leave while Cruz campaigns).

Cruz took out the loans in the first half of 2012, when he was being heavily outspent in the Republican Senate primary by David Dewhurst, the wealthy Texas lieutenant governor, who was pouring millions of dollars of his own money into the campaign. Dewhurst beat Cruz in the primary but failed to win 50% of the votes, forcing a two-way runoff. Cruz came roaring back and won the runoff two months later. With a weak Democratic opponent in the general election, Cruz easily won the Senate seat vacated by Kay Bailey Hutchison.

A lot of candidates take out loans to help fund a campaign. As long as Cruz got his own loans on normal terms—at an interest rate comparable to market rates, with no sweetheart terms—the loans ought to be legit in their own right. The Times characterized the Goldman loan as a “low-interest” deal, but it’s worth pointing out that interest rates in general were at near-record lows back in 2012.

 

The two bank loans apparently went to the Cruzes personally, rather than to the campaign. That also isn’t unusual. If the loans were administered properly, the banks would have wanted collateral -- something a political campaign doesn’t really have. But the Cruzes did have collateral, such as investment accounts and other assets. The Cruzes then loaned the money they got from the banks to the campaign. That could be problematic, if the FEC digs deep enough, because if some of the money came from Heidi Cruz, it could be construed as a campaign donation subject to a limit of $5,400. The amount handed over to the campaign obviously exceeded that.

If Cruz plays nice with the FEC and accepts a modest penance, one question will still remain: Was the failure to disclose really inadvertent? There are reasons to be doubtful. "He's an extremely sophisticated guy," Carol Pepper of investing firm Pepper International says in the vide above. "His wife certainly knew. She works at Goldman. These are not hicks. For him not to be disclosing this, it's ridiculous."

Were he truly willing to break the rules, Cruz might have had reason to keep the bank loans a secret. For one thing, they gave his campaign a lifeline at a crucial moment of the race, when announcing the need for loans might have made his campaign seem underfunded and vulnerable.

As the Times points out, Cruz was also cultivating a homespun image of husband and wife risking their own life savings on a cause they believed in, which would seem a lot less endearing if the public knew it was bankrolled, at least in part, by Wall Street money. Plus, Cruz may have felt it was prudent to keep Goldman Sachs, his wife’s employer, off the books, since it might look like cronyism or, at a minimum, an unusual privilege.

The FEC has cut back on fines for campaign finance violators in recent years—but still acted in some cases. Last spring, it fined Democratic Ohio Congresswoman Marcy Kaptur $6,400 for the late reporting of a large donation. In 2014, the agency fined retired Democratic Congressman Edolphus Towns of New York $5,000 for the personal use of campaign funds while he was still in office. Not exactly eye-popping fines.

Ted Cruz can certainly afford a slap on the wrist, since his net worth is at least $3 million. He’s also unlikely to run short of campaign funds ever again. Cruz is one of the better-funded candidates in a crowded field competing for donors. His presidential campaign has raised at least $45 million so far, with super PACs supporting Cruz pulling in at least $40 million more. And his fundraising pace is accelerating as he surges in the polls. Taking out those loans in 2012 appears to have been a prudent risk, even if they weren’t prudently reported.

Rick Newman’s latest book is Liberty for All: A Manifesto for Reclaiming Financial and Political Freedom. Follow him on Twitter: @rickjnewman.

Above is from:  http://finance.yahoo.com/news/how-ted-cruz-fixes-the-goldman-sachs-loan-scandal-181559074.html#