by Mike ‘Mish’ Shedlock
The Street
Illinois bonds have yields over 5 times AAA rated states, and over double Connecticut, the next worst state.
Wirepoints reports Illinois Debt Trading at Junk Levels.
A new borrowing by Illinois shows lenders are already treating the state like it’s junk-rated.
Last week, Illinois raised $800 million from the bond market with repayment dates through 2045. The borrowed money, meant for summer construction projects and a pension buyout program, costs Illinois as much as 5.85 percent yearly. No other state in the country pays such high interest rates.
Over the life of the $800 million bond issue, Illinois will end up paying $450 million more in interest costs than if it were a AAA-rated state.