CHICAGO - Standard & Poor's yesterday placed on negative watch the short-term ratings of $375 million of bonds sold by the Illinois Housing Development Authority and the Wisconsin Housing and Economic Development Authority because they carry liquidity support from the Federal Home Loan Bank of Chicago.

Standard & Poor's last week placed the FHLB of Chicago's AA-plus long-term rating and A-1-plus counterparty rating on CreditWatch with negative implications after the Dallas and Chicago Federal Home Loan Banks ended their merger talks amid questions over the Chicago branch's exposure in the subprime mortgage market.

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