Illinois Budget Impasse Drives Borrowing Costs to 17-Month High
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Illinois’s Republican governor and Democratic-led legislature are at an impasse over how to fill a $6.2 billion budget hole, undermining the state’s credit in the eyes of investors and driving up borrowing costs.
The extra yield buyers demand on Illinois bonds relative to benchmark debt has climbed to the highest since 2013, according to data compiled by Bloomberg. Asset managers at Conning and Wasmer, Schroeder & Co. say Illinois, already with the lowest credit rating among U.S. states, is at risk of being cut closer to junk.