Finance committee delays bond sale after market volatility

On March 2 the West Chicago Finance Committee was told by staff and the city’s financial adviser that volatility in global markets prompted a recommendation to postpone the city’s planned competitive bond sale by two weeks.

Anthony Miceli of Spear Financial said market demand from underwriters was weak following recent international escalation and that “money is just sitting on the sidelines waiting until they know what’s gonna happen.” Staff said the sale will be rescheduled and the committee will consider an updated bond ordinance at a special finance committee meeting on March 16.

Why it matters: timing affects the interest rate the city pays and the schedule for related public-works projects. Miceli said the top concern was not a lack of bidders alone but that conservative or thin bidding could yield a higher-than-expected interest rate; he said he had hoped for a rate under 4 percent, in the mid-3.8 percent range.

Miceli explained options if market conditions do not improve: the city could reject bids that do not fit market expectations or pursue a negotiated sale with an underwriter to place the bonds. City staff cautioned that postponing the sale beyond two weeks could create significant scheduling problems for public-works projects tied to the financing.

City staff and Miceli said they will stay in communication over the next two weeks and return with a recommendation; a special finance committee meeting has been scheduled for March 16 to consider a revised bond ordinance.

The committee did not take a formal vote on the sale timing during the March 2 meeting; staff made the scheduling recommendation and the committee asked staff to return with updated documents.