Illinois Bonds an Opportunity for ‘Bold’ Investors, Citi Says

  • Debt paying highest yields over benchmark since at least 2013
  • Multi-notch downgrade into junk is unlikely, Citi says
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Illinois’s nearly two-year budget impasse has created a buying opportunity for municipal-bond investors willing to bear the risks, according to Citigroup Inc.

With the Democrat-led legislature and Republican Governor Bruce Rauner unable to forge agreement on how to close the state’s chronic budget deficits, Illinois’s 10-year bonds yield 4.43 percent, or 2.45 percentage point more than top-rated municipal borrowers, according to data compiled by Bloomberg. That’s the biggest premium since the indexes were started in January 2013.