Illinois’s Bond-Market Penalty Hits Lowest Since Pandemic Crash
- 10-year yields hover around 2.8%, down from over 6% in March
- Lowest-rated state benefits from hunt for higher yield debt
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No state is reaping the bond-market benefits from the promised end of the pandemic more than Illinois.
The state, whose bonds tumbled early this year on speculation it would become the first stripped of its investment-grade credit rating, has since seen its bonds rally back as investors plow into higher-yielding debt on speculation the financial blows of the shutdowns won’t be as bad as once feared. That’s driven down the yield on Illinois’s 10-year bonds from more than 6% in March to about 2.8%, reducing the yield penalty investors are demanding to the smallest in nine months, according to Bloomberg’s BVAL indexes.