Illinois Faces Rising Yields as Politics Cloud Return to Market
- State is selling $500 million of general-obligation bonds
- Yields on its bonds are nearly twice as much as benchmark
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When Illinois returns to the bond market this week, its legacy of protracted fights over the budget will cast a costly shadow.
The lowest-rated state’s $500 million sale Wednesday comes as investors demand steadily higher payouts to compensate them for the government’s financial strife. While the difference between the yields on Illinois bonds and top-rated securities narrowed sharply after the state boosted taxes and ended its budget impasse in July, the gap has been steadily rising again amid the uncertainty caused by election-year politics.