bond rating

Flickr user Daniel Borman / "Money, Money, Money" (CC BY 2.0)

Illinois is nearing the start of a third fiscal year without a budget. This has resulted in a backlog of unpaid bills, and unfavorable judgment by credit agencies.

 

As of last week, the state owes an outstanding $14.5 billion, and only $18 million is available to make payments.  State Comptroller Susana Mendoza said a court case asking healthcare organizations to be paid first may push the state to the breaking point.  

Illinois' Bond Rating Takes Another Hit

Jan 25, 2013
Illinois.gov

Illinois' bond rating continues to slide. Standard and Poor's has lowered Illinois to an A minus. The impact could mean it will cost Illinois more to borrow money for various projects and needs.

S&P Lowers State Rating Once Again

Aug 29, 2012

Illinois’ large budget imbalance and an $83 billion unfunded pension liability have led Standard & Poor's Ratings Services to lower the state’s credit rating from A-plus to A.

Today’s announcement also gives Illinois a negative outlook for the future.

The action on the state's general obligation bonds comes less than two weeks after a special Illinois legislative session on pension reform ended with no resolution on reining in the pension costs.

The state of Illinois didn’t have any trouble selling $1.5 billion in debt to repay a federal loan for its unemployment-insurance program, the Wall Street Journal reported.

Crain’s Chicago Business said interest rates for the three-series offering were “rock bottom,” thanks to the dedicated stream of unemployment insurance taxes backing them up -- separate from Illinois' general fund. Also, any extra money from the tax can be used only to pay off the debt, providing extra protection for investors.

People familiar with the deal said it received many more orders than there were bonds available.