Chicago investor conference will include 'lakeside chat' with mayor

BY SourceMedia | MUNICIPAL | 05/13/24 12:22 PM EDT By Jennifer Shea

On Friday, Mayor Brandon Johnson will headline the city of Chicago's 2024 investor conference at the Chicago Cultural Center, geared toward an open Q&A format and organized around the narrative that rating agencies have underestimated the city.

"We think Chicago's ratings are lower than they ought to be, given the size, strength, economic vitality and growth that the city is experiencing," Chief Financial Officer Jill Jaworski told The Bond Buyer. "We're the third largest city in the country. We have 2.8 million residents and a tremendous diversity in our workforce ? we are the most diverse city, as far as industries go, of any major city. And those [strengths] give us a lot of resources."

Fitch Ratings and S&P Global Ratings rate Chicago's general obligation bonds BBB-plus. Kroll Bond Rating Agency assigns them an A rating. Moody's Ratings assigns them a rating of Baa3.

Early in the day, the city will offer tours focused on public and private economic development, in addition to mainstays like a tour of O'Hare International Airport. The Chicago Neighborhood Initiative will also host a tour of the Pullman neighborhood on the city's south side, a revitalizing area that played a key role in the city's labor movement.

The 2022 conference included tours of the airport and the future site of the Bally's casino, and a preview of the city's first social-designated GO bond deal, which went on to win The Bond Buyer's Deal of the Year award.

This year, Jaworski will kick off a series of panels and introduce the theme of the conference.

An official from the Federal Reserve Bank of Chicago will speak on the regional economy; Metropolitan Pier and Exposition Authority CEO Larita Clark will discuss the rebound in travel and conference activity; and representatives from Chicago's departments of housing and economic development will present, as well.

Chicago's private sector will also be there: panelists include representatives from United Airlines, the National Football League's Chicago Bears and Campari Group, according to Jaworski.

"In prior years, some of the focus has been more on walking through a lot of the city's credit metrics, and focusing on a broader presentation similar to what you might see on an investor call for a general obligation bond," she said. "And we're going to hit on some of those things, but probably spend less time on that and more time on the panels."

Assistant Finance Commissioner Brendan White said that while the city's finance team doesn't plan to break any major news at the conference ? no trial balloon for new bond issuances in the billions, for example ? they do hope to introduce investors to the mayor's plan for the city and to officials from the new administration.

The conference lands two days after the first anniversary of Johnson's inauguration.

"We're just sort of talking about what our priorities are and how we're continuing to put economic development at the center of the mayor's vision," White said. "Even though the mayor has a lot of spending programs that we want to do to continue to invest in the city of Chicago, we're very careful about trying to pair all of those with revenues that are coming along with them. And a big part of that is continuing to foster economic growth in the region."

Part of that plan is the $1.25 billion bond measure that passed the City Council last month. The bonds will finance affordable housing and economic development programs that were set to see funding dry up due to a tapering off of pandemic relief funds and a structural decline in long-term revenue sources.

"We are really pleased that we are getting to move forward with that program, and we're already working on the first bond deal," Jaworski said.

The conference will wrap up with a "lakeside chat" with Johnson, a Q&A that will give investors a chance to hear from the mayor directly on his financial vision for the city. It's a vision that includes significant investments in economic development, Jaworski said.

"We think that a lot of times the rating agencies look at the city through the lens of the city's liabilities, and not the city's capacity to meet all of its needs," she added. "And so we're really focused on the economic strength of the city... We're going to hear from business leaders who have made major investments in the city and are supportive of the direction the city's going."

The conference is targeted for institutional professionals. A registration link is available through the city's investor relations homepage.

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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