Illinois Rally Defies Warning of Pension Insolvency: Muni Credit
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Debt sold by Illinois issuers is rallying the most in 20 months in the face of a warning that the state’s pensions may run out of money and drain funding from education, infrastructure and local aid.
Investors seeking to enhance returns amid the lowest municipal interest rates in a generation shrank the extra yield on bonds of Illinois and its localities to 1.43 percentage points last week, the least since February 2011, data compiled by Bloomberg show. The yield spread relative to AAA tax-exempts is still the highest among 19 states tracked by Bloomberg.