CHICAGO, March 11 Illinois, which postponed a
$500 million bond sale in January, is planning to announce a new
bonds sale as soon as this week, a state official said on
The preliminary official statement for the deal will be
published this week for a sale at the beginning of April, said a
state official who asked not to be identified.
At the end of February John Sinsheimer, the state's capital
markets director, had said Illinois was planning to go ahead as
soon as late March, after the presentation of the new budget,
with a competitive sale of the general obligation bonds.
Governor Pat Quinn presented the new budget plan last week.
Illinois yanked the deal that was scheduled for competitive
bidding on Jan. 30 because of credit concerns that threatened to
boost the state's borrowing costs.
Just days before the sale date, Standard & Poor's Ratings
Services cut Illinois' rating to A-minus with a negative
outlook, the lowest level among states it rates. The credit
downgrade could lead to investors demanding higher interest
rates on Illinois bonds, costing the state government more money
in debt service payments.
Investors' concerns over credit quality have driven up the
amounts the state must pay to borrow. On Friday the spread of
yields on Illinois debt to Municipal Market Data's benchmark
scale was 140 basis points for a 10-year bond. For the last
year, the spread has averaged 149.8 basis points, the second
highest after financially-troubled Puerto Rico.
On Monday Illinois, which has the worst-funded state
pension system in the country, agreed to settle federal civil
securities fraud charges alleging it repeatedly misled municipal
bond investors about the underfunding of its pensions, the
Securities and Exchange Commission said on Monday.