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Illinois Curtails Debt Plan With Yield Spike Countering Upgrades

May 17, 2022, 8:09 PM

Illinois is returning to the $4 trillion muni market with a scaled-down $1.63 billion offering as its borrowing penalty reaches the highest since January 2021.

The elevated borrowing costs will erode the benefit from recent credit-rating upgrades as its tax revenue recovers from the pandemic. Already, the state has been forced to downgrade its issuance ambitions by as much as $180 million, according to a preliminary pricing wire viewed by Bloomberg. Yields on benchmark state and local debt have continued to climb.

Why It’s Noteworthy

Illinois had planned to sell almost $1.82 billion of bonds, according to initial bond documents. ...