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  #71  
Old 04-03-2013, 06:53 AM
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http://m.sj-r.com/sjr/pm_60616/conte...tguid=CbMNA3od

Quote:
Illinois sold $800 million worth of bonds Tuesday, two months after postponing a sale in the wake of a state credit downgrade.

State officials said Illinois received “attractive low all-in costs” on the bonds, but it could have been better.

“The state continues to pay a significant penalty for its failure to address the shortfall in pensions,” John Sinsheimer, director of capital markets for Gov. Pat Quinn’s budget office, said in a statement.

....
The bond sale was comprised of two parts — a $450 million tax-exempt issue and $350 million in taxable bonds. The tax-exempt bonds carried a 3.92 percent interest rate, while the taxable bonds had a 4.97 percent interest rate. All of the bonds will be used to pay for public works construction projects.

Quinn’s budget office said Illinois’ last sale of tax-exempt bonds in January 2012 also received a 3.92 percent interest rate. The last sale of taxable bonds in January 2012 had a 5.29 percent interest rate.

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  #72  
Old 04-03-2013, 09:16 AM
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Anybody know what kind of spread these guys get?

https://www.vendorassistance.com/Pro...nois/Home/Home
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  #73  
Old 04-03-2013, 11:59 AM
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http://mobile.bloomberg.com/news/201...n-penalty.html

Quote:
Buyers awaiting progress on plans to overhaul the worst- funded state pension system demanded about 1.33 percentage points of extra yield above benchmark munis for 10-year tax- exempt debt that Illinois sold yesterday. That’s almost triple what California had to pay last month.
In sales about a year ago, the Illinois yield penalty was only double that of the most-populous state. Since then, Standard & Poor’s has cut Illinois twice, to A-, six steps below AAA, as legislators failed to advance a pension fix. Meanwhile, the company raised California’s credit for the first time since 2006, to A, one level higher, after Governor Jerry Brown, a Democrat, proposed a budget for the year beginning July 1 that would leave the state with its first surplus in almost a decade.
“It’s a different credit situation -- California has definitely made some difficult steps,” said Robert Miller, who helps oversee $32 billion of munis in Menomonee Falls, Wisconsin, at Wells Capital Management. He said the company didn’t buy the Illinois offer because the spreads were too narrow. “Illinois at this point is more of the status quo.”
....
Illinois plans to sell another $1 billion of general obligations this year for capital projects and may come back to the market as soon as May, Sinsheimer said. Passage of pension- overhaul laws would expedite the borrowing, he said.

Proceeds of Illinois’s sale will pay for road, rail and school projects. Bank of America Merrill Lynch beat out eight other banks for the debt, which was offered via auction.
....
At 1.97 percent, yields on 10-year muni benchmarks compare with 1.86 percent on federal debt. The local-bond interest rate has exceeded that on Treasuries since March 13, the longest stretch since September.
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  #74  
Old 04-03-2013, 12:53 PM
Beach Bum Beach Bum is offline
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So Casetta of Wells Capital in Wisconsin supports Illinois and is all about their bonds; while Robert Miller of the same firm said his company didn't buy the offer at this point Illinois is "status quo."

These guys need to start doing lunch breaks together more often.
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  #75  
Old 04-11-2013, 10:33 AM
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This does not bode well

http://www.reuters.com/article/2013/...0CX2S920130410

Quote:
Illinois lawmakers eye $2.5 bln bond deal to pay bills

(Reuters) - Illinois would add $2.5 billion to its credit card balance to pay old bills--including $2 billion owed to Medicaid providers--under a bill pending before the House of Representatives.

The bill, which has the support of powerful Democratic House Speaker Michael Madigan, underscores the unorthodox measures Illinois lawmakers are considering in the face of $9 billion in unpaid bills and a pension underfunding approaching $100 billion.

A House committee on Wednesday passed the measure, which authorizes the sale of $2.5 billion of general obligation bonds. Because it has Madigan's backing, the measure could come to a vote before the legislature concludes its spring session on May 31.

Previous efforts to sell state bonds to pay vendors-- including doctors, hospitals and social service agencies--have failed to gain traction. But the November election gave Democrats a super-majority in both the House and Senate, meaning the measure theoretically could win the super-majority of votes required for bond issuance without any Republican support.

Seriously? GO bonds for operational expenses? Not a good sign.

I expect the following graph to go up again.

http://illinoispolicy.org/blog/blog....cleSource=5715

Quote:
California, another highly troubled state, pays only half a percentage point more than the AAA states.

Illinois pays nation’s highest borrowing penalty
Premium over borrowing rates of AAA-rated states
10-year general obligation bonds
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  #76  
Old 05-21-2013, 05:12 PM
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Hope springs eternal

http://mobile.bloomberg.com/news/201...ni-credit.html

Quote:
Illinois debt is rallying the most since 2011 as investors bet lawmakers will end two decades of inaction and pass a measure to fix the worst-funded U.S. state pension system.

With 11 days left in the budget session, each legislative chamber has approved a pension-overhaul bill. The house plan will save $150 billion over 30 years, while the senate version, endorsed by public-employee unions, would cut the shortfall by about $50 billion. Passing either may halt downgrades that have made Illinois the lowest-rated state.

Illinois would join states such as New York and Rhode Island that have moved to reduce pension costs. States and localities faced more than $2 trillion in unfunded public-employee retirement obligations in 2010, according to Moody’s Investors Service.

“I would think they get a compromise this time -- the market will be pretty disappointed if they don’t,” said Tim McGregor, who oversees about $30 billion as director of municipal fixed-income at Northern Trust Corp. in Chicago. “Spreads have rallied in on the news, and they could widen pretty quickly if they don’t come to terms with anything.”
....
Resolution Anticipated

“The spreads are kind to them, quite frankly, given what the problems are,” he said. “They already consider some potential resolution.”

S&P said in its January report downgrading Illinois that even though it’s unusual for states to fall into the lowest investment-grade tier, “lack of action on pension reform” could prompt another rating cut. S&P, Moody’s and Fitch Ratings give the state a negative outlook.
.....
Cheaper Money

Across Illinois, localities are getting cheaper borrowing costs as the state moves closer to a pension fix. Buyers demand 1.42 percentage points of extra yield on 10-year debt from Illinois and its localities relative to top-grade securities, down from 1.48 percentage points on May 1, Bloomberg data show. That’s still the widest spread among the 19 states tracked by Bloomberg.

Illinois also faces $9 billion in unpaid bills to vendors. The state may chip away at its backlog with a $2.5 billion bond sale approved by a house committee last month. It will also pay some of the bills with a one-time surge of about $1.3 billion of income-tax revenue, the governor said this month. S&P said there’s “limited upside potential” for Illinois’s credit rating in the next two years because of its liabilities.
“They’ve dragged their feet longer than any state,” McGregor said. A pension overhaul “isn’t their only issue, and it’s not going to all of a sudden mean the credit is AA.”

Still, “the market is pretty focused on this” legislative session, McGregor said. “They need to get this right.”
Yeah, let's check back in two weeks.
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  #77  
Old 06-05-2013, 02:52 PM
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To the surprise of no one, Illinois did nothing on pension reform this legislative session

so this results:
http://www.nbcchicago.com/blogs/ward...209987271.html

Quote:
Fitch Ratings, one of three major ratings agencies, on Monday lowered Illinois' credit rating after lawmakers failed to enact a solution to fix the state's nearly $100 billion pension shortfall.

The firm said it would drop the Illinois rating from "A'' to "A-." Illinois already has the lowest rating in the nation. Lower ratings mean paying higher interest rates on borrowed money.

"Fitch believes that the burden of large unfunded pension liabilities and growing annual pension expenses is unsustainable," the firm said in a statement, "and that failure to achieve reform measures despite the substantial focus on this topic exacerbates concern about management's willingness and ability to address the state's numerous fiscal challenges.

Gov. Pat Quinn said in a statement the downgrade is no surprise.

I checked; the other rating agencies haven't done anything yet on the "news" of nothing happening.
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  #78  
Old 06-06-2013, 02:36 PM
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Moodys now

http://www.chicagotribune.com/busine...,6673265.story
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  #79  
Old 06-06-2013, 04:22 PM
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This is the last S&P action on Illinois I can find:
http://articles.chicagotribune.com/2...gative-outlook
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  #80  
Old 06-27-2013, 07:30 AM
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http://www.reuters.com/article/2013/...95P18P20130626

Quote:
(Reuters) - Illinois sold $1.3 billion of general obligation bonds on Wednesday at fatter yields as investors demanded a higher return due to the state's inability to rein in huge public pension costs.

Bonds due in 25 years in the Illinois deal yielded 5.65 percent or 160 basis points over Municipal Market Data's triple-A scale compared to a spread of 138 basis points on Tuesday. That matches the record-high 160 basis-point spread last hit in January 2011.

The 4.46 yield on uninsured 10-year bonds resulted in a spread over MMD's scale of 165 basis points versus 145 basis points on Tuesday.

"This deal offered considerable value and subsequently received strong interest," said Domenic Vonella, a MMD analyst.

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