Transaction Details

City of Marengo

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Baird served the City as placement agent on its issuance of $24 million General Obligation Grant Anticipation Promissory Note, Series 2024.

The City was awarded an Illinois Department of Commerce & Economic Opportunity grant in the amount of $26,900,000 to fund major water and sewer improvements. The City was seeking a nonrevolving promissory note/draw bond structure to mitigate cashflow concerns for this reimbursable DCEO grant. The City would only draw as needed on the promissory note to cover project costs.

As placement agent, Baird worked diligently with the City and its counsel to canvas 10 banks and summarize the terms of each one to help the City secure this unique and important financing structure. The City received bids from two banks with different constraints on draws, prepayment terms, document requirements and fees.

The winning bid was a national bank with a variable interest rate through 2028 which is calculated at = (30-day SOFR rate (or floor of 0.50%) + Spread of 1.76%) * 79%; Reset on the 1st of month (5.585% as of January 2024). The winning bank did not require a banking relationship, did not charge an unused fee for any undrawn principal, provided flexible draw period/payoff terms, and had no event of default terms.