Illinois Downgraded by Moody's as State Budget Crisis Escalates
- Moody's maintains a negative outlook on the state's debt
- Illinois was already the worst-rated state in the nation
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Illinois, already the worst-rated state in the nation, was cut to three steps above junk by Moody’s Investors Service as its budget stalemate drags on into a fourth month.
The one-level downgrade to Baa1 from A3 affects about $26.8 billion of general-obligation bonds. Moody’s also lowered the state’s sales-tax securities to Baa1 from A3, and its appropriation bonds to Baa2, two steps above speculative grade. Moody’s has a negative outlook on the debt.