Chicago Parking Meters to sell $600 million of debt

Chicago Parking Meters LLC, the Morgan Stanley unit with a 75-year concession to collect parking revenue in the city, plans to sell $600 million of 10-year notes as soon as today after canceling a smaller offering in July.

Chicago Parking Meters, which is also owned by Allianz Capital Partners GmbH and Abu Dhabi Investment Authority, may pay a yield on the debt of 300 basis points, or 3 percentage points, more than similar-maturity Treasuries, according to a person familiar with the offering who declined to be identified because terms aren't set.

Drivers in Chicago, the third-largest U.S. city, may pay the company at least $11.6 billion to park at city meters over the life of the lease, according to documents outlining the $500 million offering Chicago Parking Meters withdrew in July. The city sold the right to collect fees from its 36,000 meters for $1.15 billion to balance its budget in 2008.

Moody's Investors Service ranks the notes Baa3, the lowest investment grade, citing “the essential role of the on-street parking system in Chicago's transportation infrastructure” and higher revenue over the next three years because of scheduled rate increases, it said today in a statement.

Barclays Plc, Credit Suisse Group AG and Morgan Stanley are managing the sale, the person said.