Illinois outpaces California in the cost to insure its bonds.
The price of a five-year credit-default swap to insure Illinois obligations rose 7 basis points to 309.1 basis points today, or $309,100 to protect $10 million of debt, from 302.2 basis points yesterday in New York,
Credit-swap costs for Illinois debt surpassed California’s, the largest U.S. municipal borrower, which saw its default- insurance contracts rise to 299.6 basis points from 298.7 basis points yesterday ..
Standard & Poor’s rates Illinois A+, two levels higher than California. Moody’s Investors Service values both at A1, the fifth-highest. The two states are the lowest-rated by Moody’s.
Illinois sold $300 million in taxable Build America Bonds to Citigroup Inc. today through a competitive offering. Debt maturing in 2035 priced to yield 7.1 percent, 297 basis points over the comparable-maturity Treasury. That is higher than the state’s $700 million negotiated Build America issue in April, when the 25-year debt priced 205 basis points above the benchmark government debt.
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