In a city notorious for corrupt politicians, the constituents of Chicago’s South Side and southern suburbs have endured more than their share. The latest evidence comes tomorrow when they head to the polls to pick party nominees in a special election for the seat of disgraced former Congressman Jesse Jackson Jr.
Illinois has set aside only 45 percent of what it needs to meet public-worker pension obligations, the worst of any U.S. state. Standard & Poor’s may cut its bond rating if lawmakers don’t come up with a fix tomorrow. Investors are unfazed.
Municipal-bond insurance, which once covered half of the $400 billion of debt sold by U.S. state and local governments annually, “won’t be making a comeback,” said Howard Cure , director of municipal research at Evercore Wealth Management.
Republicans are poised to win the most governorships since 1994 as candidates including Pennsylvania’s Tom Corbett , Michigan’s Rick Snyder and Ohio’s John Kasich seize on the faltering economy and persistent unemployment in bids to take over Democrat-led states.
Illinois, the second-lowest-rated state after California, today is selling $700 million in the largest Build America Bond offering in a month, a day after its standing was recalibrated higher by Moody’s Investors Service.
Pension bonds are joining the biggest rally in U.S. taxable municipal debt since 2008 as states from Kansas to South Carolina move to curb retirement obligations after four straight years of falling funding ratios.