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Illinois downgraded again; S&P warns of 'negative credit spiral'

Published Jun 01, 2017 01:04PM ET
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© Reuters. Illinois downgraded again; S&P warns of 'negative credit spiral'
 
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  • S&P downgrades the credit rating on Illinois' general obligation debt to BBB- from BBB. It's the third downgrade from S&P in the past year, and puts the state's credit just one notch above junk.
  • The paper also remains on credit watch, meaning another downgrade - this time to junk - could be imminent.
  • Noting a third year of stalemated budget negotiations, S&P says "unrelenting political brinkmanship now poses a threat to the timely payment of the state's core priority payments."
  • The agency also warns of a "negative credit spiral," where downgraded ratings trigger contingent demands on state liquidity.
  • Another downgrade is likely, says S&P, should lawmakers fail to agree on a budget designed to reduce the state's structural deficit.
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Illinois downgraded again; S&P warns of 'negative credit spiral'
 

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