By: Ted Dabrowski and John Klingner

A new borrowing by Illinois shows lenders are already treating the state like it’s junk-rated.

Last week, Illinois raised $800 million from the bond market with repayment dates through 2045. The borrowed money, meant for summer construction projects and a pension buyout program, costs Illinois as much as 5.85 percent yearly. No other state in the country pays such high interest rates.

To see how punitive borrowing has become for Illinois, look at the interest rates the state is paying on its 10-year bonds. At 5.65 percent, Illinois’ rate is now five times higher than the 1.13 percent rate it costs AAA-rated states to borrow.

In other words, Illinois is paying 4.52 percentage points more compared to AAA-rated states like Indiana, Iowa and Missouri.

Greg Saulnier, MMD’s managing analyst says: “(Illinois is) pretty much trading like it’s in junk category…I think anybody who’s going to buy this stuff is demanding the bigger coupon payments just for some sort of peace of mind.”

Over the life of the $800 million bond issue, Illinois will end up paying $450 million more in interest costs than if it were a AAA-rated state. 

The massive difference in costs is a reflection of Illinois’ collapsing finances. No one will lend to Illinois at favorable rates because of the state’s fiscal situation.

The state was rated one notch above junk even before the coronavirus crisis hit. And Illinois’ pension debts, its high taxes and its loss of residents already made it the extreme outlier among states.

Illinois’ precarious position was made all the more obvious when State Senate President Don Harmon and the Democratic caucus asked the federal government for a direct bailout in April. The caucus used the negative impact of the coronavirus to ask for $42 billion in funds, including $20 billion for pensions. That in turn prompted U.S. Senate President Mitch McConnell to suggest bankruptcy as an alternate solution for states like Illinois.

Illinois is paying the price for its fiscal irresponsibility. Data from Bloomberg on states’ 10-year bond yields shows Illinois pays interest rates that are multiple times higher than other states.

The fact that Illinois is willing to pay such a high cost for cash shows the state has no apparent alternatives to raise money more cheaply.

The situation for Illinois recently proved difficult when it was forced to postpone a $1.2 billion bond issue two weeks ago. Concerns about pricing and demand led the state to put the bond issuance on day-to-day status. Reports now say the state may try to tap the Federal Reserve’s new Municipal Liquidity Facility (MLF) if it can’t access the funds from the market directly. If the state does use the Federal Reserve, it will send even more bad messages to the market.

With bad finances, a bailout request, bankruptcy comments and the impact of the coronavirus hanging over it all, it’s no wonder Illinois is paying payday rates to borrow.

Read more about COVID-19 and the impact on Illinois:

*Cover image courtesy of Flicker

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Poor Taxpayer
6 months ago

Highest taxes and still broke.

Follow the money, who is getting it.

Not going to services for the General Public.

Maybe for Luxury Homes in Florida and Luxury Cars.

$100,000 per year pensions are the norm, 3% increases every year by law.

Run for your economic life, or die a slow death from Slavery to the Greedy Government Employee.

Cops, Teachers, and Firemen love you like a cat loves a Bird.

Poor Taxpayer
6 months ago

Pension

Lawrence A Wyllie $321,443.52 Started 2013-06-29

https://pensions.bettergov.org/

Goodgulf Greyteeth
6 months ago

The bond markets are the Payday Loan industry of government “finance.” Makes me sick. The difference, and problem, is that instead of putting a lien on Joe Sixpack’s car title or mortgage and giving Joe more money, at usurious rates, than Joe can afford to pay on time, the bond agencies facilitate deadbeat states like Illinois borrowing more money than Joe-taxpayer-Illinoisan can afford to repay. Joe Sixpack “private citizen” has to fork over the late-payment penalty month after month, or loose his truck or his home. Governor Tax Cheat, on the other hand, get’s his bond-agency guvmn’t “pretend revenue gold”… Read more »

Poor Taxpayer
6 months ago

Illinois is going to Tax Air soon. They have put a tax on everything else, this is the only thing left to tax.
Huge Pensions are costing the honest hard working taxpayer their quality of life.
Stay and Pay or Run For sun and fun.

Poor Taxpayer
6 months ago
Poor Taxpayer
6 months ago

Check out this link to the Database of Illinois Pensions. There should be a law against it.
It will make the poor honest working taxpayer cry.
https://pensions.bettergov.org/

DixonSyder
6 months ago
Reply to  Poor Taxpayer

Poor baby. Just pay me my 12% compounded raise every year so I can get a bigger house, bigger pool, newer cars and hire 3 more servants. Pay me!

debtsor
6 months ago
Reply to  DixonSyder

I mean really, this is how you spend your spare time? Collecting a pension and trolling those who pay the taxes to fund your lifestyle? Do you have no shame, you ungrateful pilfering low life thief?

James
6 months ago
Reply to  debtsor

Presumably he signed a contract at the beginning of his public employment knowing the general obligations and responsibilities he had as well as those of his employer. He is simply the recipient of those post-employment employer’s responsibilities at this point, their their legal obligation. You are an independent businessman apparently and enter into such arrangement legally as a consequence. Do those who rely on you in meeting your obligations to them as customers, clients, employees, or even business partners consider you a thief as well. Maybe unknown to you, but I bet some do and particularly those who refused to… Read more »

debtsor
6 months ago
Reply to  James

But he is a pension thief and the word applies perfectly. And you know it too. Don’t expect me to be complacent while he picks my pocket!

James
6 months ago
Reply to  debtsor

I’m not expecting you to be complacent. But, use a term that is better than thief because the literal definition doesn’t apply here.

Poor Taxpayer
6 months ago
Reply to  James

The Term is GONIIFF.

DixonSyder
6 months ago
Reply to  James

Thank you. Trying to have a civil conversation with debstor and the other jag, poor taxpayer, is an effort in futility. Bottom line they hate public sector workers. All of us live in Florida mansions, make 100K a year, don’t pay taxes, never paid into the retirement plans, never did a lick of work etc. Both are morons and must lead miserable lives.

debtsor
6 months ago
Reply to  DixonSyder

Says the moron who posts “Pay me” in his spare time while stealing, pilfering and thieving the taxpayers money.

DixonSyder
6 months ago
Reply to  debtsor

PAY ME MORE. How’s that? Feel better moron?

DixonSyder
6 months ago
Reply to  debtsor

F U , figure that out AH

DixonSyder
6 months ago
Reply to  debtsor

$120 K a year baby, work some overtime at the car wash so I can live a little higher in society. Aldi’s dog food is on sale, buy a case for a family treat.

Fed up neighbor
6 months ago
Reply to  DixonSyder

Eventually it will be all gone and gonna laugh my ass off you just don’t get it

Poor Taxpayer
6 months ago

The only way to solve Illinois problems is to Move out as fast as you can. Taxes will double over the next 5 to 10 years. There will be less people in Illinois to spread out the increasing HUGE PENSION DEBT. Get ready to go get a royal screwing by the greedy cops, teachers and firemen. NOTE THEY DO NOT PAY STATE OF ILLINOIS INCOME TAX ON THEIR HUGE PENSIONS. NOTE you do pay State Income Taxes on your IRA and 401-K. It is called sharing the burden, they take and you give. Feel like you are being screwed? It… Read more »

DixonSyder
6 months ago
Reply to  Poor Taxpayer

You are wrong again as I pointed out in a previous discussion. All retirement income for anyone who has a pension, SS, IRA, 401 Roth, 457 is exempt from Illinois income tax. You are wrong, again. Quit making inane statements because you have no idea of what you are talking about,

Marcia
6 months ago
Reply to  DixonSyder

Almost accurate. When I contribute to my Roth 401k in Illinois, I have to pay Illinois state taxes. (I did this for a few years and found out the hard way.). So….I have to wait to move my 401k to an IRA and then I will be able to covert state tax free…..if this doesn’t change by the time I am old enough to retire and do the conversion.

The Truth Hurts
6 months ago
Reply to  Marcia

Marcia you are talking about contributions not retirement income. Roth IRA contributions are after tax contributions so of course they are taxed. When choosing a Roth IRA one has to decide if it’s better to pay the tax on the contribution rather than not pay any tax on the withdrawal. The advantage of the Roth IRA has little advantage when it comes to state of Illinois taxes as all retirement income is not taxed, currently. Money that comes out of IRA’s and 401k’s in the form of withdrawals are not taxed in the state of Illinois. Same with pensions and… Read more »

debtsor
6 months ago

But regular pre-tax IRA retirement withdraws aren’t taxed either, right? That’s like tax free gains the state could tax but doesn’t. Pension incomes aren’t taxed either. Its a big scam because the net present value of most state pensions far far far exceeds the NPV of most retirement accounts.

DixonSyder
6 months ago
Reply to  debtsor

Ae you really that dumb or are you trying to out dumb Poor Taxpayer? 2 morons with an IQ total of 12 are trying to post meaningful garbage without the slightest idea of what they are posting about. Just remember, your dog hates you like most other people who know you.

Greg
6 months ago
Reply to  Marcia

Hi Marcia

Marcia
6 months ago
Reply to  Greg

Lol. Hi Greg. You’ve said hi to me twice and some other Marcia once. Lol. I understand the response to this post. My point was that, for people too young to retire, it is difficult to shield our retirement income from Illinois taxes. Like Truth Hurts, I believe that a lot more taxes (including retirement income) is coming in Illinois before they even consider pension haircuts (which I think will be inevitable even after they ramp up every tax they can think up). Every other means of retirement money is not taxed…..just Roth contributions. So if you don’t want to… Read more »

DixonSyder
6 months ago
Reply to  Poor Taxpayer

Go back to your minimum wage job making fries at McDonalds and start paying your fair share of taxes so I can get my COLA raise.

Jackshitz
6 months ago

Illinois politicians will just kick the can down the road as they always do!

s and p 500
6 months ago

I’ve been trying to catch up on season 6 of “The 100”. Apparently earth has suffered another nuclear apocalypse. How many of those can the planet stand? Closer to home, how many financial apocalypses can Illinois and a few other states go through? Let’s just hope our money doesn’t become worthless like it did in Zimbabwe. I can’t wait to revisit post-pandemic Las Vegas with the new social distancing in casinos.

Juicy Smollier
6 months ago

So, make the prediction, when does the default frenzy hit and blow IL up? 1 year? 2-3? Or 5?

debtsor
6 months ago
Reply to  Juicy Smollier

Ask me this question six months ago and my answer would have been 10-15 years. Ask me this question today and the answer is 10-15 months.

The Truth Hurts
6 months ago
Reply to  debtsor

So by August of 2021? I know many on this site thrive on the doom and gloom of the state but you need to be realistic. The state can avoid funding the pensions this year and that would free up around $10 billion. They can slow down paying their vendors. They can also borrow more money. States will also most likely get some additional federal money as well. No default happening in the next 10-15 months. The debt level will rise in the next 10-15 months. That’s the only real prediction. After this pandemic subsides you will see increases in… Read more »

Ben
6 months ago

Not paying the ten billion for pensions would also send the state to junk right away. Of course, the state is junk, and of course, the pensions are in fact doomed, maybe not in 10 to 15 months, but still very much doomed. Math and reality say so, and they always win. People are leaving this state more and more, and the reality of the math is simply going to win out before long. Voting doesn’t beat reality or math by the way. The pensions, no matter who is voted in, are DOOMED as is.

The Truth Hurts
6 months ago
Reply to  Ben

Agreed that not making the required pension payment would send it to junk. The ratings agencies have told them as much. That’s why JB doesn’t want to do it but he may have no choice. Then again maybe he will just borrow more money at 5.85% or higher. Just means Illinois taxpayers will need to pay more to service its’ debt.

The state will need more revenue to pay all of its’ bills. Plenty more taxes to raise benny boy. Math is simply going to win out. Open up that wallet.

Ben
6 months ago

Illinois already has the overall highest tax burden in the nation, so there is not plenty of more room for taxes. You can’t keep raising taxes as more and more people leave as well. Open up your brain. Your Corrupt Fax drivel wont be tolerated here. I can also move anytime I want, so I can just take my wallet, move, and enjoy watching your pension go bust from another state! 🙂

The Truth Hurts
6 months ago
Reply to  Ben

They can keep raising taxes and they will benny boy. Go ahead and move. I don’t care as I don’t have a pension. You seem to be confused with someone that is delivering a truthful prediction with someone who has a partisan interest. Progressive taxes to be approved in November. If not the flat rate will go to 6 or 7%. They will then try again with the original rates being promised. A few years later tax rates to be adjusted upwards until highest rate is at the 13% rate. A tax on services will be introduced. One thing this… Read more »

Ben
6 months ago

Track me down? You are an idiot. That simply will not happen. What will happen is that I will move and then watch your pension run dry, and smile while you starve in a ditch. You do get a pension, and you are a liar. Also, I already own my home, and can leave easily. Once my parents are gone I surely will move. You enjoy that pension while it lasts you selfish piece of shit. I can move whenever I want, but you can’t run from your doomed pension. Enjoy.

debtsor
6 months ago
Reply to  Ben

Whoa Ben, The Truth Hurts is on our side he’s just taking a pessimistic and cynical view of it all. He has made legitimate arguments, but I don’t agree with them for the following reasons: This budget hole will be too deep to beg (bailout), borrow (more bonds) or steal (tax) our way out of. The predicted budget deficit as of today is $7B, which I think is far, far too low. My gut and instinct tells me it’s probably more like $10B-$11B and maybe only $7B next fiscal year, and that’s based on other state’s predicted deficits (NY $13B,… Read more »

Ben
6 months ago
Reply to  debtsor

Debtsor is right on. The Lies Hurt is a Corrupt Fax goon who will be reading my happy posts about his pension running dry sooner than later.

debtsor
6 months ago
Reply to  Ben

He claims he has no pension. He’s just thinks that we’re all in a world of hurt above and beyond anything else we’ve ever seen before. he thinks pensions are excessive too. he just differs on how bad taxation can get. he thinks there is a lot of taxes left to steal. Six months ago i agreed with him – tax services, retirement income tax, progressive tax, and all the progressives would just pay it. But this black swan event happened – the wuhan red death – and suddenly he alone as gov. has dug us a hole so deep… Read more »

Ben
6 months ago
Reply to  debtsor

The Medicaid thing won’t happen. Bank on that. You are running up against federal law then. The pensions will run dry.

JimBob
6 months ago
Reply to  debtsor

I’m for bankruptcy, not bailouts. But I’m in a minority of people who worked into my 70s and saved money and paid bills when due. I get the sense that this is a shrinking minority. I’d like to understand why the growing majority of those with no savings and debts > assets are going to vote against free money for their own state and local governments. That’s to say, why won’t these voters tilt left and elect Biden and a Democrat majority in the federal legislature? How many states are so well run that their taxpaying citizens wouldn’t support bailouts… Read more »

The Truth Hurts
6 months ago
Reply to  debtsor

“unfortunately there’s little left to cut – medicaid and pensions take up massive portions, over half of the budget IIRC, and then it’s operations, interest on bonds, and salaries, etc. There’s probably not even $10B to cut unless they want to start kicking people off medicaid, and that’s the exact opposite of progressive politics” I agree there is little left to cut. You can call me pessimistic but I prefer to be seen as a realist. Even Rauner admitted there is little to cut that’s why he didn’t offer up any cuts. That’s why I believe more taxes are on… Read more »

Ben
6 months ago

The 40% prop thing will never happen because it is illegal and no one could pay that anyway. You lose. I win. Enjoy inevitable poverty while I live it up in another state soon.

Ben
6 months ago

The prog tax will most likely fail by the way. Again, Illinois is in a death spiral, and higher taxes only hasten that spiral. You lose again. Go back to Corrupt Fax RNUG. Remember, when the pensions get cut, I will be smiling and enjoying your misery.

The Truth Hurts
6 months ago
Reply to  Ben

“The prog tax will most likely fail by the way”

I hope you’re right. I personally think progressive taxes are unfair at their very core. The very idea that 51% of the people can eliminate/reduce their tax burden, make the 49% pay for it, and then get to decide how it’s spent is wrong on many levels. Unfortunately these taxes are used all around the nation and I believe soon in Illinois. The voters of Illinois have shown they have no problem spending money and want others to pay for it. I guess we will find out in November.

Ben
6 months ago

My wife just told me to “stop wasting time commenting to greedy pensioners whose pensions are obviously going to have to be cut.” I think I will take her advice. Enjoy the collapse and cut The Lies Hurt. I have better things to do for sure.

The Truth Hurts
6 months ago
Reply to  Ben

This whole time benny boy I’ve been picturing a child stomping his feet saying “taxes can’t go up any more” and “it’s not fair”. “Those mean old greedy pensioners”. Well at least your mom/wife is there to control your screen time. That’s a good benny boy. Now go outside and play.

debtsor
6 months ago
Reply to  Ben

We get you’re angry Ben but direct your anger in the right direction! The Truth Hurts is merely telling us exactly what the politicians have been preaching for years. “The voters of this state have demonstrated that they prefer to raise taxes on the “rich” instead of cutting spending. ” Yes, but that was before coronavirus. Whether this premise stays true remains to be seen. The pushback against JBeluga’s tyrannical measures may just be the beginning. As soon as we see that we can win against dough boy, a full blown tax payer revolt may be on. Progressive politicians may… Read more »

Rick
6 months ago
Reply to  Juicy Smollier

There will be no bond defaulting, no constitution change, no diminishment of pensions and probably no downsizing of the government at the state, Chicago or cook levels. Other small towns will downsize, other areas outside cook, Chicago and state levels… may even diminish a pension or two, but not the big three jurisdictions. Neither will those jurisdictions officially move to junk, at least not from Moodys. What will happen is Madigan, Fred flintstone and Lightfart will use whatever form of taxation, federal handout, fees or outright confiscation to keep their government sector big and bloated, fat and happy. Math has… Read more »

Ben
6 months ago
Reply to  Rick

If all the taxes were raised in the already highest tax state of Illinois that The Lies Hurt said, then people would leave even more and even faster. It is called a death spiral. You can’t sustain something that is already unsustainable, but then even make it more so by people and businesses leaving more and more. It wont happen. The fact he had to resort to people coming after me if I moved says it all. He is a pensioner, a liar, and when he and his spouse are starving in a ditch, I will smile, walk by, and… Read more »

debtsor
6 months ago
Reply to  Ben

Whoa, Ben, the truth hurts IS ON OUR SIDE he just disagrees about how quickly it will collapse because he thinks the death spiral will be slow – a tax here, a tax there. It will end, but not soon. And I agreed with him. But now I think the pension hole is too big to get out of. Just my household alone is barely paying any tax. My spouse got a pay cut, I sent in my estimated taxes at 50% of what I paid last year (I’m expecting a major pay cut too), I’ve filled up my gas… Read more »

F J Hoenemeyer
6 months ago

I’m a buyer ….at 15.65% I figure if I can get half my money back before Madigan repudiates the debt in 3 or 4 years , it’s a deal I might think about

SqueezeOJ
6 months ago

Thank you for taking the time to hold our state governments responsible.

TheRestoftheNation
6 months ago

Illinois residents, you deserve this mess. You did it to yourself. Now all you do is complain. I expect you will demonstrate your stupidity once again in November and vote for Biden, but It won’t matter. We don’t need you. You are irrelevant.

debtsor
6 months ago

Not all residents, not by a long shot. There were 2.14 million Trump voters to 3.01 million Hillary voters. We don’t live in California or New York where the ratio of Clinton to Trump was 2:1 or 3:1. There’s one county with a lot of ‘always vote blue no matter who’ voters who outdo the entire state. You know who you are, you jerks.

Indy
6 months ago

Exactly. Those who CHOOSE to remain in Illinois can enjoy unimaginable suffering & having their lives ruined.

UnclePugsly
6 months ago
Reply to  Indy

@Indy – And therein is the danger of holding on too long, in the hopes things may turn around. Many people I know are ‘stuck’ in Illinois because they can’t afford to take a $50k loss to sell their home. Everyone who isn’t a public employee needs to have a deliberate exit plan so they don’t get ‘stuck’ in Illinois. In my +30 years here, Illinois has only trended down – It’s not going to get better.

Indy
6 months ago
Reply to  UnclePugsly

That $50,000 loss will turn into an absolute loss when their home value drops to $0 and their property taxes are $20,000+ a year.
Some people really don’t think things through & look long term.

TheRestoftheNation
6 months ago
Reply to  UnclePugsly

The rest of the nation will once again move forward. Illinois will move in the opposite direction. The gap will widen. It’s too late to get out without taking a financial hit, but getting out is still the best strategy.

Poor Taxpayer
6 months ago
Reply to  UnclePugsly

The loss is already taken, Mark to Market is the expression.
Sooner you get out the sooner you can start to get ahead.
There are no job opportunities for the young and they are fleeing in mass.
The greedy cops, teachers and firemen are all living in luxury homes in Florida, they know enough to leave and they do not pay any State of Illinois Income Taxes.

DixonSyder
6 months ago
Reply to  Poor Taxpayer

Another idiotic post from Mr Poor Taxpayer. Wrong on so many issues. The solution for you is chair, short rope, jump.

Poor Taxpayer
6 months ago
Reply to  UnclePugsly

Getting rid Herpes will be easier than selling a house in Illinois.

DixonSyder
6 months ago
Reply to  Poor Taxpayer

Words to remember. WRONG AGAIN

Poor Taxpayer
6 months ago

Please note the huge pensions have a direct cost and the Junk Bond Rating cost.
Illinois taxpayers are getting screw twice by the greedy cops, teachers and firemen.
Note they do not pay any State Income Taxes on their pensions. It is called share the burden, they take, you give.

debtsor
6 months ago
Reply to  Poor Taxpayer

they’re all pilferers and thieves.

DixonSyder
6 months ago
Reply to  debtsor

And you are a miserable person whose dog even hates you. You are just a miserable person with no life and a failure. Stay here in Illinois and PAY ME MORE! 12% compounded COLA every year. New boat on order. 36ft, quad 300hp Yamahas in the back. Thank you!

DixonSyder
6 months ago
Reply to  Poor Taxpayer

And you again are spreading your BS. You were wrong the first time you posted your nonsense, the 3rd time, the 8th time and now the umpteenth time about state income taxes. Nobody in Illinois who receives retirement income from any retirement source pays state taxes on that income. You keep posting your BS that only public service retirees are exempt. Take your meds because your mental illness is taking over. Just remember these words, “Wrong, AGAIN”.

debtsor
6 months ago
Reply to  DixonSyder

? your post has noting to do with what the poster said. But typical lazy, stupid former government employee.

DixonSyder
6 months ago
Reply to  debtsor

Ha, you’re a joke, just ask your family. Even the dog is laughing at you.

Mr_Common_Sense
6 months ago

The Mob might have lower rates.

Bob
6 months ago

They are all in Springfield now. Madigan is the capo di tuti capi

Poor Taxpayer
6 months ago

Illinois is going to DEFAULT on paying the bonds. No interest rate is high enough for the risk being taken.
This is nothing but a PONZI SCHEME and should be against the law.

Stevet
6 months ago
Reply to  Poor Taxpayer

Yes

UnclePugsly
6 months ago
Reply to  Poor Taxpayer

I was actually surprised the spread wasn’t more.

DixonSyder
6 months ago
Reply to  Poor Taxpayer

PAY ME loser.

Rick
6 months ago

Moodys and the traders they work for will always keep Illinois “just above junk”. The market loves our yields and the safety net Moodys and the politicians here colluded to put the taxpayers last. Illinois bonds are a great safe high yield investment simply because the govt class has aligned all risk onto the backs of our kids. Nobody loses, the unions can’t lose, the investors can’t lose and Moodys can’t lose for rating the very things they manipulate. Nobody loses except our kids. The day we see a bounced pension check or a bond going default will simply not… Read more »

Ben
6 months ago
Reply to  Rick

Once enough people leave and taxes go so high and services get cut to the bone, then bankruptcy will be all that left. We are a lot closer than people want to admit. People are already leaving in higher and higher amounts. Taxes are already sky high, with the highest overall tax burden, and services are already bad. I will move in time, and I am someone who said I never would move ten years ago. This all can’t go on much longer because of those pesky things called reality and math. The kids won’t be here to tax, and… Read more »

Stevet
6 months ago
Reply to  Rick

The solution is to leave…..

SqueezeOJ
6 months ago
Reply to  Rick

Insightful response. Illinois is simply the leading edge of the rust belt states.

nixit
6 months ago

I’ve heard the argument (guess where) that since Illinois has never missed a bond payment, we shouldn’t have to pay these high rates and that the ratings for states are essentially meaningless. What would be the financially correct response to such an argument?

debtsor
6 months ago
Reply to  nixit

The lender determines the rates. The borrower can accept the terms, or simply choose not to borrow at all.

DixonSyder
6 months ago
Reply to  debtsor

My COLA rate is 12% compounded. PAY ME MORE! Go back to work slacker I need a new car.

ConcernedExpat
6 months ago
Reply to  nixit

It doesn’t make sense. It is akin to saying “well since I make my mortgage payment every month, I should get the best possible rate” when in reality the rate is determined by your financial profile. When you issue debt, you are CONTRACTUALLY OBLIGATED to make repayment under the terms which you borrowed at.

F J Hoenemeyer
6 months ago
Reply to  ConcernedExpat

Your scenario /assumption was pretty much the ‘reason’ the ratings agencies rated all that subprime mortgage debt investment grade. The past MB Prologue , but to what???

#RecallPritzger
6 months ago
Reply to  nixit

The titanic hadn’t sunk until it did. The writing on the wall is clear. In Illinois the makers lost, the takers won. Like gravity, the math is inarguable. Too bad the morons downstate are either too stupid to understand the maths or so corrupt that they don’t care… Their bug-out bags are Hermes.

ConcernedExpat
6 months ago

It should be noted that the yield on IL 10-year is likely one of the highest in the world. Comparable to emerging market countries in bad fiscal conditions ie Argentina. How these pols ever let a US sovereign state go to market like this shameful. This state is trapped in an ugly debt cycle. When countries have to tap IMF for funds and credit lines, they usually have to make serious spending cuts/overhauls. If IL has to tap federal reserve credit line it should be no different! It would be great if Wirepoints could put together a table of comparable… Read more »

debtsor
6 months ago
Reply to  ConcernedExpat

it’s quite literally a payday loan.

ConcernedExpat
6 months ago
Reply to  debtsor

Moody’s might not have the “political will” to downgrade Illinois debt to junk status at this time but the day of reckoning will come. That will be a watershed moment in U.S. state history for a variety of reasons but one of which being there will be A LOT of institutional investors that will be forced to sell it from their portfolios because they are prohibited from holding non-investment grade bonds. There could soon be a day where IL muni bonds trade at double digit interest rates.

Stevet
6 months ago
Reply to  ConcernedExpat

The democrats will just raise more taxes on us all….

DixonSyder
6 months ago
Reply to  ConcernedExpat

Sell your comic books and your GI Joe doll collection so I can get an addition on my mansion. 6 bedrooms and 6 bathrooms aren’t enough. Your dog wants to live with me.

UnclePugsly
6 months ago
Reply to  ConcernedExpat

Isn’t that what some noted BK professor said when McConnell floated the idea of allowing state BK – that states like Illinois should be treated as Banana Republics. Seems about right.