Illinois’ bond interest rates have gone down and according to State Senator Bill Brady (R-Bloomington) finally passing meaningful pension reform is the reason.
Illinois priced $1 billion in general obligation bonds Thursday and was able to claim $60 million in interest savings largely because of the major pension reform supported by a bipartisan cohort of legislators including Senator Brady who served on the Conference Committee on Pension Reform.
“Voting in favor of pension reform in December was by no means an easy vote, but we’ve seen several positive developments for Illinois’ bond sales over the last several months as a result of that vote,” said Brady. “The $60 million in interest savings from this most recent bond sale is clearly evidence that pension reform is helping Illinois.”
In December Illinois sold $350 million of taxable general obligation bonds with a decrease in penalties of 29%. The state’s bond rating outlook from S&P was also changed from negative to developing.
“These developments are encouraging, but Illinois still has a lot of work to do to be on firm financial footing,” said Brady. “Illinois still has the lowest bond ratings in the nation, pays the highest borrowing costs among the 17 states tracked by Bloomberg, and has a yield spread almost triple that of the next lowest rated state, California. We’re certainly moving in the right direction, but we can’t stop now.”