Illinois Becomes Moody’s Lowest-Rated U.S. State With Debt Downgrade to A2

Unsurprisingly, a rating agency says has downgraded Illinois' debt citing runaway pension costs:

The downgrade to the sixth-highest rating came after a legislative session that “took no steps to implement lasting solutions to its severe pension under-funding or to its chronic bill payment delays,” Moody’s said in a report. Illinois, it said, has “weak management practices.”

Moody’s revised its outlook on the debt to stable from negative, citing the state’s sovereign power over revenue and spending, and laws that establish the priority of payment for general-obligation bonds. The downgrade affects $32 billion of debt, according to the statement. Click Here for entire article: http://www.bloomberg.com/news/2012-01-06/illinois-rating-lowered-to-a2-by-moody-s-with-32-billion-of-debt-affected.html