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Illinois Becomes First to Tap Fed Loans After Yields Surge

  • State is poised to borrow $1.2 billion from central bank
  • Illinois is at risk of being first U.S. state cut to junk
A pedestrian wearing a protective mask passes an empty retail space in Chicago on May 7, 2020. 

A pedestrian wearing a protective mask passes an empty retail space in Chicago on May 7, 2020. 

Photographer: Christopher Dilts/Bloomberg
Updated on

Illinois, which has faced escalating penalties in the bond market as the coronavirus batters its finances, is poised to become the first state to borrow from the Federal Reserve’s $500 billion lifeline for local governments.

The state is planning to borrow $1.2 billion from the central bank for one-year to cope with revenue losses brought on by the economic shutdowns caused by the pandemic and the delay of its annual tax-filing deadline.