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* From the comptroller…
Illinois’ credit rating has fallen so low that the state is too risky an investment for even itself, Comptroller Susana Mendoza and Treasurer Michael Frerichs announced Friday.
The State Treasurer’s guidelines say the state should not invest in bonds with anything less than an A-minus rating. See guideline 5.0 (k) http://illinoistreasurer.gov/TWOCMS/media/doc/State%20Portfolio%20–%20Investment%20Policy_FINAL.pdf
Moody’s and Standard & Poor’s both lowered the state’s credit rating to one level above junk-bond status Thursday after the Governor and the legislature failed to reach agreement on a budget before the scheduled end of the session. This is the lowest Illinois’ bonds have been rated in the state’s 44-year history of bond ratings. The Fiscal Year ends June 30 and the agencies warn more downgrades could happen then if the impasse continues.
That means higher costs to taxpayers; more difficulty raising funds for Illinois’ most basic needs; and further cuts in services for the state’s educational institutions and its most vulnerable residents. Rating agencies and business groups are urging Governor Rauner to stop holding the budget hostage to his pet projects and negotiate a balanced budget in good faith with legislative leaders.
That point when the treasurer was supposed to stop buying Illinois bonds was actually reached a year ago in June of 2016 when S&P dropped Illinois’ rating to BBB-plus.
But, better late than never, I suppose.
posted by Rich Miller
Friday, Jun 2, 17 @ 3:06 pm
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Well, as the governor told us today, the state is on a good path to historic junk bond status, and rightfully so, so hang in there and focus, the teary-eyed little old lady told him…..
And the dressing on the side, please.
Comment by wordslinger Friday, Jun 2, 17 @ 3:14 pm
So who is actually buying our bonds?
How much of our long term debt has already been converted to these financial instruments?
The same questions apply to those bonds issued by our Universities.
Comment by illini Friday, Jun 2, 17 @ 3:39 pm
Surely the public employees unions will buy the bonds? After all, they always claim that Illinois has plenty of money and isn’t even close to being broke. They should put their money where their mouths are.
Comment by Jerry Friday, Jun 2, 17 @ 4:09 pm
–Surely the public employees unions will buy the bonds?–
There are no lack of buyers for the bonds. It’s just more juice to pay.
Comment by wordslinger Friday, Jun 2, 17 @ 4:20 pm