Series of November 2019 Capital Bonds
Security
Security for Illinois General Obligation Bonds
The full faith and credit of the State is pledged for the punctual payment of principal and interest under the Bond Act
о The State can draw from all State funds in the State Treasury that are not restricted by law to another use if needed
to pay debt service on GO bonds
Statutorily Mandated
Debt Service Set
Asides (GOBRI)
. Under the Bond Act, monthly transfers are made from various State funds to the General Obligation Bond Retirement
and Interest Fund (GOBRI), in amounts sufficient to pay the next interest and principal payments when due, which
effectively results in the State transferring 1/12th of the next principal payment and 1/6th of the next interest payment
every month
GOBRI is a separate fund in the Treasury that can be applied to debt service payable on GO bonds and short-term debt
Continuing
Appropriation of
Funds
•
The Bond Act requires the Governor to include an appropriation in each annual budget of monies in an amount
necessary to pay all principal and interest due and further requires the General Assembly to make appropriations
annually to pay debt service on outstanding GO Bonds from GOBRI
In the absence of appropriations, the Bond Act itself constitutes an irrevocable and continuing appropriation of all
amounts necessary to pay principal and interest
. Principal and interest on all outstanding GO Bonds must be paid even in the absence of a State budget
Additional Protection
under Illinois
Constitution and State
Laws
.
The Bond Act explicitly provides bondholders the remedy to sue the State to compel payment of GO bonds
The provisions of the Bond Act, pledging the full faith and credit of the State to GO bonds issued thereunder, are by their
terms irrepealable to any outstanding GO bonds
The Illinois Constitution contains a "non-impairment" clause that prohibits action by the General Assembly that would,
under contract law, impair the obligations of a contract between the State and its bondholders
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