CPS DEEPER IN DEBT, BUT INTEREST WILL BE LOWER

Chicago’s cash- strapped public school system on Friday went deeper into debt to finance “critically needed” construction and maintenance work, and the interest it will pay — while still high compared to other governments — will be lower than on its last borrowing deal.

Rather than sell the $ 150 million worth of bonds on the open market, the Chicago Public Schools sold them to JPMorgan in what’s known as a “private placement.”

Investors often expect higher rates of return on private- placement deals in exchange for the usually quicker amount of time it takes for them to be completed, according to Investopedia and other investment websites. But Friday’s deal will work out better for school officials than their last one — a sign of CPS’ dire financial condition.

The newly issued bonds, to be paid off in 2046, were sold at yields of 7.25 percent, CPS officials said.

The school system’s most recent bond sale before then — which occurred on the open market in February — was for $ 725 million at yields of 8.5 percent. Those bonds are to be paid off in 2044.

Ron DeNard, the school system’s senior vice president of finance, praised Friday’s bond sale, saying it came “at a significantly more favorable interest rate” than the last one and “will fund critically needed capital work.”

Those projects include $ 43.7 million in additions and modular classrooms at the Oriole Park, Edwards, Canty, Jamieson, Mt. Greenwood and Dore schools; $ 13 million in information- technology upgrades and $ 5.7 million in emergency plumbing work, including lead abatement projects.