Whoo hoo! We are definitely the Second City, or maybe I should say, the second state, according to this Bloomberg article:
ILLINOIS, the second-lowest-rated U.S. state after California, will take bids on March 11 from banks seeking to underwrite $300 million of Build America Bonds and $56 million of non-subsidized taxable notes. The deal will finance school construction, according to John Sinsheimer, director of capital markets for Illinois. The state, which last sold Build America Bonds in a $1 billion deal on Jan. 28, is rated A2 by Moody’s, A+ by S&P and A by Fitch. A statutory requirement calls for 25 percent of all state debt to be bid competitively, Sinsheimer said. Banks led by William Blair & Co. will negotiate the sale of an additional $700 million in Build America securities in mid-March, he said. (Added March 2)
Not only is Illinois poorly rated from a credit perspective, we often don’t do a good job of selling the debt. This post described how a Chicago government entity issued bonds and sold them for an uncompetitive price, generating instant profits from the purchasers of that debt. You’d think that since the state of Illinois issues so much debt, at least we’d be good at it, but perhaps not.
Cross posted at LITGM
“how a Chicago government entity issued bonds and sold them for an uncompetitive price, generating instant profits from the purchasers of that debt.”
My null-hypothesis would be that somebody got paid off.
My question would be whose relatives bought the bonds? I’m old enough to remember when the Illinois Toll Road was built. The conventional wisdom at the time was that the turns and curves were there to make sure it went through every politician’s land. Hastert did something similar last year. There is nothing new in Illinois politics.
I’d have thought that school construction would have been one of the first things cut in the budget of a state in such bad financial shape. It’s not as if the population or the number of schoolchildren is growing, after all.