Loop Capital in the News

September 28, 2007
Chicago Sun-Times
By Fran Spielman, City Hall Reporter

Minority firms get 100% of latest city bond issue
GO BOND | First time in history of Chicago management fees

Black and Hispanic aldermen have complained for years that minority firms ride the caboose on the gravy train of pinstripe patronage tied to city bond issues.

Not anymore. For the first time in Chicago history, management fees tied to a general obligation bond issue will be 100 percent minority.

On Thursday, the City Council approved the $900 million GO bond issue, with every one of the underwriting firms owned by minorities.

The team includes: Loop Capital Markets as senior manager; Samuel A. Ramirez & Co. as co-senior manager and Cabrera Capital Markets Inc. and SBK Brooks Investment Corp. as co-managers. Loop Capital and Cabrera are based in Chicago.

Finance Committee Chairman Edward M. Burke (14th) called the borrowings "historic," adding, "It proves that minority firms are, indeed, emerging from this process and taking a new and important role in senior management of debt."

Ald. Walter Burnett (27th) complained just a few months ago about the subservient role that minorities played on city bond issues.

Now, he's praising Mayor Daley and Chief Financial Officer Paul Volpe for "trying to do what's fair and what's right. . . . The 30 percent minority set-aside shouldn't be a ceiling. It should be a bottom."

At a Finance Committee meeting earlier this week, Volpe credited Daley and the City Council for "providing opportunities to minority-owned firms" and the companies themselves for demonstrating "their broad capabilities."

"Our joint efforts to help grow the size and capacity of minority-owned firms have resulted in a larger, stronger stable of firms from which we can chose when we seek to issue bond transactions," he said.

The Council also approved $900 million in water revenue bonds with 50 percent minority participation and $250 million in motor fuel tax bonds where minority companies share 48 percent of the management fees.

Roughly $600 million of the general obligation bond issue will be used to refinance old debt at lower interest rates. The deal is expected to save Chicago taxpayers $35 million in borrowing costs.