S&Pplaced Illinois' general obligation debt on credit watch with negative implications. It did assign an A-plus rating to a pending $300-million sale of taxable Build America Bonds for state infrastructure work.
S&P said it based its decision on "the state's growing budget gap, ongoing liquidity pressure and the lack of recurring solutions under consideration for fiscal 2011 and beyond."
"We continue to believe that Illinois has the capacity to restore budget balance due to the absence of tax limitations or stringent constitutional" limits, S&P added. "But its willingness to implement difficult and politically unpopular measures to restore budget balance is questionable."
If Illinois' debt rating was lowered, it would have to pay somewhat higher interest costs to borrow money.
To read more click on the following : S&P hits state officials, threatens bond downgrade | Greg Hinz | Crain's Chicago Business
Or go directly to the S&P source: http://img.en25.com/Web/StandardandPoors/IL%20GO%20Mar%2026%2010.pdf
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