About this bond issuance
The City will use the proceeds from the sale of the 2017 Series A, B and C (Non-AMT) Senior Lien Refunding Bonds to: (i) refund outstanding Senior Lien Bonds (ii) fund the Reserve Requirement for certain Series of the 2017 Senior Lien Refunding Bonds, and (iii) pay issuance costs of the 2017 Senior Lien Refunding Bonds.
The City will use the proceeds from Series D (AMT) to (i) pay the costs of the 2017 Airport Projects including expansion of Terminal 5, (ii) fund the related Reserve Requirement for the 2017D Senior Lien Bonds, (iii) capitalize a portion of the interest on the 2017D Senior Lien Bonds, and (iv) pay issuance costs.
The Terminal 5 expansion will increase the number of gates in the terminal from 19 to 28, and will increase the size of the gates.
ObligorThe obligor is the organization that holds ultimate responsibility for the bond issuance, and will ensure that investors get repaid.
Limited Obligations of the City of Chicago
IssuerOften the obligor. However, sometimes issuers partner with an authorized conduit financing non-profit within their state or city to issue the bonds.
City of Chicago - Chicago O'Hare Int'l Airport
AuthorityBefore an issuer can raise money for a project, they must first have the legal authority to do so. This authority is sometimes preceded by a general election, and awarded after the successful passing of a bond measure.
The 2017 Senior Lien Bonds will be issued under the authority granted to the City as a home rule unit of local government under the Illinois Constitution of 1970. The 2017 Senior Lien Bonds will be issued pursuant to an ordinance adopted by the City Council of the City on September 14, 2016 (the "Bond Ordinance"). The 2017 Senior Lien Bonds will also be issued and secured under the Master Indenture of Trust Securing Chicago O'Hare International Airport General Airport Revenue Senior Lien Obligations dated as of September 1, 2012 (as amended and supplemented from time to time, the "Senior Lien Indenture") from the City to U.S. Bank National Association, Chicago, Illinois, as successor trustee to LaSalle Bank National Association (the "Trustee"), as supplemented by the Fifty-Ninth Supplemental Indenture (the "Fifty-Ninth Supplemental Indenture"), the Sixtieth Supplemental Indenture (the "Sixtieth Supplemental Indenture"), the Sixty-First Supplemental Indenture (the "Sixty-First Supplemental Indenture") and the Sixty-Second Supplemental Indenture (the "Sixty-Second Supplemental Indenture" and collectively with the Fifty-Ninth Supplemental Indenture, Sixtieth Supplemental Indenture and Sixty- First Supplemental Indenture, the "2017 Supplemental Indentures" and each a "2017 Supplemental Indenture") each dated as of June 1, 2017 and each from the City to the Trustee.
The Senior Lien Indenture grants to the Trustee a first lien on and pledge of Revenues (as herein defined) derived from the operation of Chicago O'Hare International Airport ("O'Hare") to secure, on a parity basis, (i) the 2017 Senior Lien Bonds which are described in this Official Statement, (ii) all of the issued and Outstanding Senior Lien Bonds (as defined in the official statement) and (iii) any other Senior Lien Obligations (as defined in the official statement) issued by the City in accordance with the Senior Lien Indenture. The terms "Revenues," "Senior Lien Obligations" and "Outstanding Senior Lien Obligations" are more fully described and defined under the heading "SECURITY FOR THE 2017 SENIOR LIEN BONDS" in the Official Statement.
SecurityThe security section is a breakdown of the funds an issuer is planning to use to repay its investors. This repayment can come from a variety of sources, including local taxes.
The 2017 Senior Lien Bonds and the interest thereon will be limited obligations of the City payable from and secured by a pledge of Revenues derived from the operation of O'Hare and will be secured on a parity basis as to Revenues with the City's Outstanding Senior Lien Bonds and such other Senior Lien Obligations as may be outstanding from time to time, as more fully described in the Official Statement.
In addition, please see the below pledge security for each series of the 2017 Senior Lien Bonds
Series 2017A: Revenues
Series 2017B: Revenues, and a subordinate pledge of passenger facility charges
Series 2017C: Revenues and federal Grant Receipts
Series 2017D: Revenues
TrusteeThe trustee is a third-party, often a large bank or financial institution, responsible for all payment flows between an issuer and an investor. This trustee is in charge of processing coupon payments.
U.S. Bank National Association, Chicago, Illinois