While New Jersey's credit troubles pale in comparison to Illinois, the Garden State's financial stress is also influencing investors, as reflected in recent trading levels.

NewOak Fundamental Credit noted in a March 6 report that New Jersey spreads to the Municipal Market Data's top-rated benchmark have been "grinding wider" and look poised to test its high of 105 basis points set in September 2015. Illinois, the only U.S. state with lower bond ratings than New Jersey, saw its spread reach a new peak 238 bps in late 2016 and was at 215 in early March.

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