Illinois Bondholders Stand Pat as State Veers Toward Cut to Junk
- It would be first state on record to lose investment grade
- Investors see fixable political morass, not financial freefall
Chicago
Source: Getty ImagesThis article is for subscribers only.
Some of the top holders of Illinois debt aren’t bailing out, even as the state slides toward a junk bond rating. The reason? They say Illinois isn’t an economic basket case, just the victim of a political logjam that will one day be broken.
“Illinois’s problems are self-inflicted,” said Guy Davidson, director of municipal bonds at AllianceBernstein Holding LP, which owns about $550 million of the bonds. “They have the resources to pay their debt and we think they ultimately will.”