How Long Can Illinois Hold onto its Investment Grade Rating?

 

The Bond Buyer has an interesting article which asks the question “How long can Illinois hold on to its investment grade rating?”  With a budget impasse approaching 2 years and political gridlock with no resolution in sight, pressure may be on the ratings agencies.  Budget deficits, growing piles of unpaid bills, and mountainous net pension liabilities have no near term resolution.

According to The Bond Buyer article, Illinois GO debt (current rating: BBB/Baa2) trades at >200 basis points to the Municipal Market Data’s top-ranked benchmark.  Municipal Market Data’s BBB 10-year index trades at 97 basis points.  Ratings are nice, but market sentiment seems to be saying that Illinois debt is already lost its investment grade rating.

The Bond Buyer article