Illinois Downgrade, Tax Decline Weigh on $500 Million Bond Sale
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Illinois, whose projected deficit equals half its proposed $25.9 billion budget, plans to sell $496.7 million of debt backed by sales taxes today after two rating cuts and as consumers unexpectedly curbed buying in May.
The bonds, funded with the state’s 80 percent portion of sales taxes, carry the top rating from Standard & Poor’s and AA+ from Fitch Ratings, the second-highest. That’s better than the state’s grade on general-obligation debt, which is supported by overall revenue. Both Fitch and Moody’s Investors Service cut the rankings on those securities one level this month as lawmakers failed to close a $13 billion revenue shortfall in the budget proposed for the fiscal year beginning July 1.