Illinois Has the Nation's Highest Borrowing Cost by Far
Mish
Wirepoints reports Illinois Debt Trading at Junk Levels.
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.
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.Â
Illinois Borrowing Penalty
Illinois’ True Retirement Cost is 58% of the Budget
On May 4, I noted Illinois’ True Retirement Cost is 58% of the Budget
Illinois has the worst funded pension plans in the nation. That was true before Covid-19 as well.
New Jersey, Hawaii, Connecticut, and Kentucky are next in line. But no other state comes close to having that much of their budgets swallowed by retirement costs.
On April 17, I commented Illinois is Insolvent: State Requests a Pension Bailout From Congress
No Bailout
Illinois does not deserve a bailout. Its pension woes are of it own making and have nothing to do with the coronavirus.
Illinois debt trades like junk, because it is junk.
Mish
%2Fhttps%3A%252F%252Fspecials-images.forbesimg.com%252Fimageserve%252F5ec445080470b60006056a3e%252F0x0.jpg%253FcropX1%3D0%26cropX2%3D4771%26cropY1%3D138%26cropY2%3D2824 "Why California Is In Trouble – 340,000 Public Employees With $100,000+ Paychecks Cost Taxpayers $45 Billion")