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  #61  
Old 01-28-2013, 10:47 AM
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Quote:
Originally Posted by Brad Gile View Post
It is just a matter of time.
I would have thought that the 66.667% income tax increase that the state took only 2 years ago would have Illinois coffers rolling in cash & topping off those pension accounts.



I might have to move. I hear Texas is nice.
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  #62  
Old 01-29-2013, 04:35 PM
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I would have thought that the 66.667% income tax increase that the state took only 2 years ago would have Illinois coffers rolling in cash & topping off those pension accounts.
Surely you jest.
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  #63  
Old 01-29-2013, 04:38 PM
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Don't call him Shirley.

Separately, let's take a look at how many times Illinois has been downgraded recently

http://illinoispolicy.org/blog/blog....cleSource=5470



And here has been the effect on their bond spread



on the tax hikes:
Quote:
Two years ago, Illinois passed a record 67 percent tax hike. The tax hike raked in $6.4 billion in new money in 2012 — and $0.80 of each new dollar went straight to government worker pensions.
Well, it did go to pensions, you see.
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  #64  
Old 01-30-2013, 02:21 PM
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i guess they can learn

a little

http://my.chicagotribune.com/#sectio.../p2p-74219492/

Quote:
Illinois budget officials say the state will delay today's planned sale of $500 million in construction bonds after a recent credit downgrade.

A spokesman for Gov. Pat Quinn's budget office said the decision was made after conversations with potential bidders led officials "to believe the market is unsettled because of recent actions and comments made by the bond rating agencies."

It's unclear when the state would go back to the market or if the delay would impact the building schedule of a statewide public works program.
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  #65  
Old 01-30-2013, 02:25 PM
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It is just a matter of time.
That's why it's a debt watch.
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  #66  
Old 02-05-2013, 12:00 PM
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A more full history of the credit rating of Illinois:


from here
http://capitolfax.com/2013/02/05/bond-rating-history/
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  #67  
Old 02-11-2013, 09:13 AM
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http://www.chicagobusiness.com/artic...next-bond-test

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With money slated for highway projects and school construction, Illinois needs to sell its $500 million bond issue soon or lose the first part of the construction season. But last week's State of the State speech by Gov. Pat Quinn and the upcoming release of his proposed budget for next year make it difficult to produce all the disclosures to investors that are necessary for the state to go back to the market in the next few weeks.

However, without any new, positive information—such as a breakthrough on pension reform or a realistic plan to reduce budget deficits—investors are unlikely to be much more receptive than they were last month.

“Illinois is going to have to pay high yields to sell debt, plain and simple,” Chicago economist David Hale says. “There's no sign that will end anytime soon.”

....
Rather than negotiate with one or two large buyers, the state planned to take competitive all-or-nothing bids to raise $500 million. Because the deal was pulled, the online auction didn't take place. But dealers discussed with the state whether they planned to bid and their tentative price.

“We've been careful not to comment,” says Abdon Pallasch, a spokesman for the governor's budget office. But he characterized the spreads as “too high and too wide.”

In recent months, Illinois bonds have traded at about 1.5 percentage points higher, or 150 basis points above the rate for the most creditworthy state government borrowers. But those bonds sell in chunks of a few million dollars at a time, and bond dealers were said to be looking last month for a spread of 175 to 180 basis points to absorb $500 million in new Illinois bonds.

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Old 03-11-2013, 02:36 PM
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http://www.forbes.com/sites/edwardsi...ond-offerings/

Quote:
The Securities and Exchange Commission today finally charged the State of Illinois with securities fraud for misleading municipal bond investors about the impact of problems with its pension funding schedule as the state sold more than $2.2 billion in municipal bonds from 2005 to early 2009. It’s now eight years after the inception of the wrongdoing and the state’s impending pension crisis has hardly been kept secret. Given the number of cities and states facing pension meltdowns, let’s hope the SEC becomes more efficient in ferreting-out misleading pension disclosures.

....
According to the SEC’s order instituting settled administrative proceedings against Illinois, the state established a 50-year pension contribution schedule in the Illinois Pension Funding Act that was enacted in 1994. The schedule proved insufficient to cover both the cost of benefits accrued in a current year and a payment to amortize the plans’ unfunded actuarial liability. The statutory plan structurally underfunded the state’s pension obligations and backloaded the majority of pension contributions far into the future. This structure imposed significant stress on the pension systems and the state’s ability to meet its competing obligations – a condition that worsened over time.

....
Today’s enforcement action marks the second time that the SEC has charged a state with violating federal securities laws in their public pension disclosures. The SEC charged New Jersey in 2010 with misleading municipal bond investors about its underfunding of the state’s two largest pension plans. Again, no fine was imposed in that matter.

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  #69  
Old 03-20-2013, 10:30 AM
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http://www.chicagobusiness.com/artic...emplate=mobile

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Illinois' fiscal woes hit state university credit ratings

March 19, 2013
(Reuters) — Illinois' credit woes are spreading to public universities and governments that have ties to appropriations from the cash-strapped state.

Moody's Investors Service late on Monday downgraded the credit ratings of four universities and revised the rating outlooks on four others to negative because of their reliance on state funding and the negative outlook it slapped on Illinois' A2 rating in December.

The actions affect about $2.5 billion of outstanding debt.

The credit rating agency also warned that further deterioration of Illinois' general obligation rating, future higher education funding cuts and payment delays could also pull the universities' ratings down.

The rating actions on the universities followed the multi-notch downgrade last week of Chicago's $181 million of outstanding motor fuel tax debt to A3 from Aa3, based in part on the state's deteriorating credit quality.

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Old 04-02-2013, 12:09 PM
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http://www.bloomberg.com/news/2013-0...ni-credit.html

Quote:
Investors betting the worst is over for Illinois have driven its debt to the strongest level in two years as the state offers $800 million of general-obligation bonds, its biggest sale in 11 months.

Lawmakers are advancing measures to fix the worst-funded U.S. state pension system, encouraging investors to look past events of the first quarter. Illinois in January became the state with the lowest credit rating, causing it to postpone a debt sale. Last month it settled with the Securities and Exchange Commission over claims it misled bond buyers.
....
There’s more upside than downside at this point,” said Eric Friedland, head of muni research in New York at Schroder Investment Management North America, which oversees $2 billion of local debt, including Illinois general obligations. “The legislature is getting the message. Investors want to see pension reform.”
.....
“We don’t expect to see them go below A-,” said Casetta, who helps oversee $32 billion in munis for Wells Capital in Menomonee Falls, Wisconsin. “We’ve been big buyers of Illinois debt in the past, and we’ll continue to support the state, particularly now that they’re trying to do the right thing.”
....
Moody’s Investors Service said in a March 26 report that litigation “may once again deter action or lead to reforms with little effect.” The New York-based company affirmed Illinois’s A2 rating, also its worst state grade, with a negative outlook, meaning its credit could be cut further.
....
Still, investors in the $3.7 trillion municipal market are confident they will get paid. Illinois has one of the seven strongest legal protections among state general-obligations, as measured by Fidelity Investments in a 2011 report.
Even with the added security, the yield spread on Illinois issuers relative to AAA tax-exempts is the highest among 19 states tracked by Bloomberg. The fifth-most-populous state may have to increase interest rates by as much as 0.1 percentage point to get its deal done, Hayes said.
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