CTA seeks board authorization to issue $450M in bonds tied to Red Line Extension; tender offers planned

Finance staff, joined by the CTA director of treasury, asked the board to authorize two financing actions: (1) issue Series 2026 corporate purpose bonds payable from the sales tax receipts fund to provide about $450 million in new capital for projects including the Red Line Extension; and (2) launch tender offers to refund previously issued 2017 tax-exempt and 2020b taxable bonds to realize present-value savings.

Staff said the $450 million level is consistent with the project financial model and CTA and RTA-approved capital plans and that it was included in the agency's Full Funding Grant Agreement with the Federal Transit Administration that supports the Red Line Extension federal funding. They said market conditions suggest tender offers could produce about $5 million to $6 million in present-value savings depending on investor participation. The proposed bonds would have maturities up to 35 years and be eligible for refunding after 10 years; S&P and Kroll were conducting ratings with expected analyses to follow.

Director Ocasio (transcript: Director Ocasio/Raqueto) announced she would abstain from the item due to a conflict of interest; the board placed the ordinance on the omnibus for approval. Staff said that upon board approval they would post official notice to the investor community and move forward to complete the transaction in February.

Estimated savings, timing and final terms are subject to market conditions and final bond pricing; staff noted the rating agencies' forthcoming analyses and the plan to post investor notice following board permission.