Chicago releases RFQ for underwriters

Chicago released a request for qualifications for underwriting services on April 30, in an effort to form pools from which to choose firms to manage bond deals.

Responses must be emailed to the city by 4 p.m., CDT, on June 18.

Firms that responded to the city's August 2021 underwriter RFQ will not be grandfathered in and will have to respond in order to be considered for the new pools.

The 2021 RFQ set up a pool with a duration of four years, which is now ending, said Steven Mahr, assistant commissioner, debt manager for the city's finance department.

"Certain of the city's needs change, but many needs are the same or similar," Mahr said.

Something else that's changed since the last RFQ: Citi has exited the muni sector and UBS has left negotiated muni underwriting, with Citi saying the economics were no longer viable given its firm-wide commitment to increasing returns. UBS said it was repositioning to focus on where it saw client and advisor demand heading.

"Citigroup (C/PN) and UBS had worked with the city from time to time," Mahr said.

The firms chosen will help the city with the issuance of bonds and notes for the city's general obligation, Sales Tax Securitization Corp., O'Hare Airport, Midway Airport, water and wastewater credits, according to the RFQ.

The city plans to establish a senior manager pool and a co-manager pool. The two pools will last for a minimum of two years, but the city may choose to extend them.

Senior managers will have to provide comprehensive book-running services involving structuring, marketing, selling and underwriting city and STSC debt. Co-managers will have to market, sell and underwrite city and STSC debt.

"The acceptance of a firm into either one of the pools does not guarantee participation in a transaction or vest the respondent with any rights with respect to the city," the RFQ notes.