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Tollway finance committee reiterates conservative investment policy and 25‑year debt maturity limit
Summary
Finance staff reviewed the Tollway's investment policy and debt management guidelines, emphasizing statutory and trust‑indenture constraints that limit investments largely to government securities and money‑market funds, an investment yield near 4%, and a 25‑year legal limit on bond maturities.
Finance staff on Jan. 21 presented the Tollway's investment policy and debt management guidelines to the Finance & Audit Committee, reiterating that statutory requirements and the agency's trust indenture narrow permissible investments largely to U.S. government and agency securities, certain money‑market funds and fully collateralized deposits.
Kathy (finance) said the policy — adopted May 22, 2014 — is designed to preserve principal while providing liquidity and reasonable return, and that the Illinois State Treasurer serves as custodian for funds held in state custody. She noted that amendments to expand permissible investment types would require changes to statutes, the trust indenture, and likely approval by multiple stakeholders including bond trustees and, where applicable, the governor and General Assembly.
Kathy presented quarter‑by‑quarter cash and investment balances through Sept. 30 and said a report covering December 31 would be presented in March. She said the current investment yield is approximately 4% given prevailing market conditions.
On debt, Mike McIntyre summarized the guidelines used for bond issuances and refinancing, emphasizing governance practices that preserve fiduciary independence (financial advisors cannot also act as underwriters), the Toll Highway Act's 25‑year maturity limit, and a target debt‑service coverage of 2x to help maintain a double‑A‑minus credit profile. McIntyre said the Tollway currently has no variable‑rate debt or interest rate swaps outstanding and that any future use of variable‑rate instruments or hedges would require board approval and adherence to specified guidelines and counterparty due diligence.
Directors asked about the potential value of outside consultants and whether the statutes or board drive investment strategy; Kathy said the agency coordinates with the State Treasurer's office and bond trustee and that statutory/trust indenture constraints are the primary limits on permissible investments. The committee did not propose immediate policy changes, but members indicated interest in continued monitoring of available investment vehicles that would remain within statutory limits.
