Illinois Faces Millions in Extra Debt Costs From Budget Fiasco
- $1 billion issue would cost $175 million more over 25 years
- Land of Lincoln hasn't sold bonds for more than 18 months
This article is for subscribers only.
When Illinois returns to the municipal market after its unprecedented 18-month borrowing drought, it may find its budget impasse will cost taxpayers millions of dollars in the coming decades.
On a $1 billion offering of 25-year tax-exempt bonds, it would cost about $175 million more now than if an equal amount was issued with spreads at 2014 levels, based on data compiled by Bloomberg that assumes the yield equals the interest rate paid. Now in its fifth month without a spending plan, signs are mounting that debt sales for cash-strapped Illinois are only going to get more expensive.