State of Illinois General Obligation Certificates, Series of May 2020A, B & C Investor Presentation April 29, 2020
Disclaimer This Investor Presentation is provided as of April 29, 2020 for a proposed offering by the State of Illinois (the “State”) of its General Obligation (“GO”) Certificates, Series of May 2020A, Series of May 2020B and Series of May 2020C (the “Certificates”). If you are viewing this presentation after April 29, 2020, there may have been events that occurred subsequent to such date that would have a material adverse effect on the financial information that is presented herein, and the State has not undertaken any obligation to update this electronic presentation. All market prices, financial data and other information provided herein are not warranted as to completeness or accuracy and are subject to change without notice. This Investor Presentation is provided for your information and convenience only. Any investment decisions regarding the Certificates should only be made after a careful review of the complete Preliminary Official Statement, dated April 29, 2020. By accessing this presentation, you agree not to duplicate, copy, download, screen capture, electronically store or record this Investor Presentation, nor to produce, publish or distribute this Investor Presentation in any form whatsoever. This Investor Presentation does not constitute a recommendation or an offer or solicitation for the purchase or sale of any security or other financial instrument, including the Certificates, or to adopt any investment strategy. Any offer or solicitation with respect to the Certificates will be made solely by means of the Preliminary Official Statement and Official Statement, which describe the actual terms of such Certificates. In no event shall the the State be liable for any use by any party of, for any decision made or action taken by any party in reliance upon, or for any inaccuracies or errors in, or omissions from, the information contained herein and such information may not be relied upon by you in evaluating the merits of participating in any transaction mentioned herein. You should consult with your own advisors as to such matters and the consequences of the purchase and ownership of the Certificates. No assurance can be given that any transaction mentioned herein could in fact be executed. Past performance is not indicative of future returns, which will vary. Transactions involving the Certificates may not be suitable for all investors. You should consult with your own advisors as to the suitability of the Certificates for your particular circumstances. Clients should contact their salesperson at, and execute transactions through, an entity of the Underwriters or other syndicate member entity qualified in their home jurisdiction unless governing law permits otherwise.
Table of Contents 1. Plan of Finance 5 2. Illinois’ Strong and Diverse Economy 9 3. Update on FY 2020 Enacted Budget and FY 2021 Revenues 12 4. Pension Updates 21 5. Debt Overview 24 6. Timeline and Contacts 27 Appendix – Key Staff Bios 3
Presentation Participants JB Pritzker, Governor of Illinois Alexis Sturm, Director of the Governor’s Office of Management and Budget Paul Chatalas, Director of Capital Markets 4
1. Plan of Finance
$1,200,000,000 General Obligation Certificates, Series of May 2020 – Issuance Terms and Schedule Financing Structure* Financing Overview To provide funds to the State to replace expected reductions in Optional Use of Proceeds revenues of the State caused by the economic impact of the Series Par Amount Maturity Redemption Date COVID-19 pandemic. The Certificates are direct, full faith and credit general Series of obligations of the State issued pursuant to Section 9(d) of Article $350,000,000 May 15, 2021 February 15, 2021 May 2020A IX of the Illinois Constitution of 1970 and the Short Term Borrowing Act, as amended (the “Short Term Borrowing Act”). Security Series of The Short Term Borrowing Act constitutes an appropriation out $350,000,000 May 15, 2021 April 15, 2021 May 2020B of any money in the State Treasury of an amount sufficient to pay the principal of and interest on the Certificates as the same Series of becomes due. $500,000,000 May 15, 2021 Non-callable May 2020C Interest Payment Interest on each Certificate, computed on the basis of a 360-day year of twelve 30-day months, is payable at the maturity date. Dates* Total $1,200,000,000 Mode Fixed Rate Certificates Denomination $5,000 and any integral multiple thereof Moody’s: Requested, Fitch: BBB- (Negative) Ratings Sale Date* May 6 th Closing* May 15th *Preliminary, subject to change. 6
Recent Legislative Accomplishments Bolster the State’s Inherent Credit Strengths Inherent Illinois Credit Strengths Governor’s First Year Accomplishments ü Passed a balanced bipartisan State budget on time ü Sovereign State with significant revenue flexibility ü Passage of the Income Tax Amendment that will be ü Illinois’ economy is the 5th largest in the voted on by Illinoisans in November 2020, along with United States and 18th largest worldwide P.A. 101-008, establishing new rates contingent upon passage of the Income Tax Amendment ü Statutory provisions give priority to debt service over other State expenditures ü Approved and launched Rebuild Illinois, a bipartisan capital bill that is the largest in the State's history ü GO Bond debt service has an irrevocable and continuing appropriation, insulating it from ü Increased State early childhood and K-12 funding political debates ü Legalized adult-use cannabis ü Annual GO Bond debt service is limited by statute, unless waived by the Treasurer and ü Consolidated suburban and downstate police and the Comptroller firefighter pension fund investment The Governor and the General Assembly Have Worked Together in a Bipartisan Manner to Pass Significant Legislation 7
2. Illinois’ Strong and Diverse Economy
Illinois’ Strong Economic Foundation Strong and Diverse Expansive Transportation Highly Educated Population Economy Network • Broad employment base with no • Illinois is home to the 3 rd and 27 th busiest • Illinois is home to top ranked universities industry accounting for more than U.S. airports in O’Hare and Midway 2 bringing talented and educated 20% 1 individuals to the State • Illinois is the only state where all 7 class I railroads in the United States operate 3 • Illinois is well-positioned for long- • 35.1% of Illinois residents have college term stability through economic degrees, above the US at 32.6% and the cycles Midwest region at 31.1% 4 • State’s diversified economy is a major attraction for workers and recent graduates across the nation Mining, Logging, Construction Information and Trade, 3% Other Services Transportation 6% and Utilities 20% Finance 6% Manufacturing Professiona 10% l and Business Leisure and Services Hospitality 16% 10% Education Government and Health 13% Services 15% 1. Bureau of Economic Analysis, as of June 2019 2. FAA, Commercial Service (Rank Order) based on Calendar Year 2018 as of 12/20/2019 9 3. IDOT, http://idot.illinois.gov/transportation-system/Network-Overview/rail-system/index 4. 2018 American Community Survey 1 year estimates, those with a bachelor’s degree or higher as a share of population 25 years or older
Illinois’ Robust Economic Indicators Per Capita Personal Income 1 Average Non-farm Employment and Unemployment 2 $60,000 0.01 Employment (Thousands) 0.01 $56,000 0.01 $52,000 0.00 $48,000 0.00 0.00 $44,000 0.00 $40,000 - 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 4 United States Illinois Great Lakes IL Unemployment Rate National Unemployment Rate Illinois Real GDP Per Capita 3 Illinois’ per capita income is ranked 1 st among ü $64,000 the Great Lakes Region 4 and 3 rd among the 10 $62,000 most populous states Chained 2012 Dollars $60,000 $58,000 Illinois’ real GDP per capita exceeds that of the ü $56,000 Great Lakes states and of the U.S. overall $54,000 Illinois is home to 36 Fortune 500 companies, ü $52,000 ranking fourth in the U.S. $50,000 $48,000 2015 2016 2017 2018 2019 United States Illinois Great Lakes1 4 10 1: Bureau of Economic Analysis as of March 24, 2020. 2. Bureau of Labor Statistics, seasonally adjusted, 2019 IL numbers are preliminary 3. Bureau of Economic Analysis, 4/7/2020. 4. Great Lakes states include Illinois, Indiana, Michigan, Ohio and Wisconsin.
3. Update on FY 2020 Enacted Budget and FY 2021 Revenues
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