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Illinois Faces Rising Risk of Cut to Junk Over Pandemic Hit

  • S&P lowers Illinois outlook to negative as economy worsens
  • State more likely to carry non-investment grade rating: MMA
The Chicago Board of Trade at the end of a nearly empty Lasalle Avenue in Chicago on April 3.
The Chicago Board of Trade at the end of a nearly empty Lasalle Avenue in Chicago on April 3.Photographer: Christopher Dilts/Bloomberg

The risk of Illinois falling into junk territory is growing amid the economic toll and costs from battling the coronavirus pandemic.

The lowest-rated U.S. state is “increasingly likely” to be the first to carry a non-investment-grade rating on its general-obligation bonds, according to a Municipal Market Analytics report. Covid-19 threatens to reverse Illinois’s fiscal progress and could hurt the prospects of voters approving a progressive income tax in November to bring in more revenue, MMA analysts Matt Fabian and Lisa Washburn said in the report.