CHICAGO – Illinois’ weakened fiscal condition and battered ratings translate in steep borrowing penalties for taxpayers but won’t lead to a default any time soon, an academic research paper argues.

The state earlier this month suffered a fresh round of downgrades from two rating agencies after the legislature failed to agree on a plan to overhaul  a pension system saddled with $95 billion of unfunded liabilities. The negative headlines and worries over the state’s solvency have attracted national attention, eroding market perception and driving up the state’s borrowing rates.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.