Fitch Downgrades Illinois bonds
NEW YORK, Dec 15, 2008 (BUSINESS WIRE) — Fitch Ratings has lowered the rating on $19.1 billion general obligation (GO) bonds of the State of Illinois to ‘AA-‘ from ‘AA’. The Rating Outlook is Stable. The rating on the state’s GO bonds has long reflected the breadth and wealth of its economy and its moderate debt burden; however, the rating downgrade reflects deterioration of the state’s fiscal position and a continuing inability to achieve solutions. While Fitch was not requested to rate the upcoming offering of GO notes, Fitch has reviewed the long-term rating in conjunction with the information provided from the note sale disclosures as well as from direct communications with, and information provided by, state officials. The rating on $2.2 billion of outstanding Build Illinois sales tax revenue bonds has been affirmed at ‘AA’ and assigned a Stable Outlook.
The state’s rating was last affirmed in April 2008 for a GO bond sale, at which time Fitch noted continued financial challenges, including a $750 million fiscal year (FY) 2008 revenue shortfall, balancing an upcoming FY 2009 budget pressured by the weakened national economy and ongoing growth in pension funding requirements.