Credit rating agency Fitch recently downgraded it rating on $26 billion in general obligation bonds held by the State of Illinois from A- to BBB+ — the lowest rating of any state in the nation.
Soon after, credit agency Moody's also downgraded Illinois' rating on bonds from A3 to Baa1.
Before the Moody's downgrade, the company had warned Illinois that the state could be downgraded because of a skipped pension payment planned for November.
Fitch's downgrade was based on Illinois' slow economic recovery, which has lagged behin the rest of the country. Fitch also cited the state's long-term liabilities, ongoing budget gaps, and reduced flexibility as a result of the budget impasse.
Additionally, the Fitch rating was lowered from BBB+ to BBB for bonds on the Illinois Sports Facilities Authority, McCormick Place, and Chicago’s motor fuel revenue bonds.
Moody’s also downgraded its rating of sales-tax bonds from A3 to Baa1 and lowered the Metropolitan Pier and Exposition Authority and Civics Center bonds from Baa1 to Baa2. Moody’s outlook for Illinois and each additional obligation remains negative.