Illinois is searching for a new capital markets director following Kelly Hutchinson’s move back to the private sector after three-and-half years managing state debt issuance.
“Our search for a capital markets director is proceeding. Several candidates have been interviewed,” Carol Knowles, a spokeswoman for the Governor’s Office of Management and Budget, confirmed in an email.
Hutchinson has held the post within GOMB since November 2015. Hutchinson took the job during former Gov. Bruce Rauner’s tenure and was asked to stay on after J.B. Pritzker took office earlier this year.
Local public finance sources said Hutchinson, a lawyer who graduated from Tulane University Law School, had planned to join Katten Muchin Rosenman LLP after closing on the state’s last bond deal earlier this spring and then using vacation time.
Katten Muchin
Before joining the state, Hutchinson spent 10 years at the former A.C. Advisory Inc. where she was a director and chief compliance officer. PFM Financial Advisors LLC acquired the firm in 2016. She also held an investment banking analyst position at JPMorgan for two years.
Local market participants with a state relationship said they’ve been told their contact for the time being is Cameron Mock.
Mock returned to the state to take on the role of chief of staff and senior fiscal advisor to Deputy Gov. Dan Hynes in February. He had previously worked for the state as a budget manager from 2013 to 2015. He left state government to work in financial and policy roles at Chicago Public Schools, most recently as senior policy advisor and previously as a director of fiscal policy and analysis and a budget manager.
Hutchinson’s departure comes with the state’s borrowing levels potentially ramping up if lawmakers pass a multi-year capital infrastructure package this session. Pritzker has presented lawmakers with a draft capital plan that relies on $17.8 billion of borrowing over six years.
Pritzker’s proposed budget calls for up to $1.5 billion GO borrowing to pay down the state's unpaid bill backlog. The state previously sold $6 billion of GOs in 2017 to pay down the backlog.
“There is still a significant portion of the bill backlog that is accruing interest costs. We will be working with the legislature to obtain authorization to issue backlog bonds and will review potential size and timing at that time,” Knowles said.
The new fiscal year that begins July 1 would see $600 million of GO bonds for capital and $700 million of GOs for an ongoing pension buyout. In early 2020, the state would return to borrow $500 million of GOs for capital, under a borrowing schedule from the state. The administration has dropped plans to seek approval to sell $2 billion of pension obligation bonds.
The state sold $1.7 billion in 2018, $6.3 billion in 2017 including the $6 billion backlog borrowing, $3.4 billion in 2016, nothing in 2015, $2.4 billion in 2014 and $3.4 billion in 2013.
Illinois is rated one notch away from a junk rating by Moody’s Investors Service and S&P Global Ratings. Both assign a stable outlook. Fitch Ratings has the state two notches above junk with a negative outlook.
State spreads have recently shrunk to a three-year low due to the market’s hunger for high yielding paper and the market’s perception that after strong revenue collections in April, the decision to drop a partial pension holiday and progress in putting a graduated income tax question on the ballot mark fiscal progress.
