Illinois credit woes continue: Fitch and Moody’s downgrade

On Oct. 19, credit rating agency Fitch
officially downgraded its rating
on $26 billion in Illinois general
obligation bonds from A- to BBB+, the worst rating of any state in the country.
On Oct. 22, Moody’s
followed suit
, downgrading Illinois bonds from A3 to Baa1. Moody
s had
warned earlier in the week that a skipped pension payment planned for November
could affect their rating of Illinois
debt
further.

 


In downgrading the states
debt, Fitch cited Illinois
weak economic recovery
compared to the rest of the country – long-term liabilities, ongoing budget
gaps, and reduced flexibility as a result of the budget impasse. Fitch also
lowered the rating from BBB+ to BBB for bonds on the Illinois Sports Facilities
Authority, McCormick Place, and Chicago
s
motor fuel revenue bonds.


 


Moodys also lowered its rating of sales-tax bonds from A3 to Baa1 and
lowered the Metropolitan Pier and Exposition Authority and Civics Center bonds
from Baa1 to Baa2. Moody
s outlook for Illinois and each additional obligation remains
negative.


 


Fitch downgrade: https://www.fitchratings.com/site/fitch-home/pressrelease?id=992554


            Moody’s downgrade: https://www.moodys.com/research/Moodys-downgrades-Illinois- outstanding-27B-of-GO-bonds-to-Baa1–PR_337211

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