CHICAGO, June 9 Prices on some Illinois general
obligation bonds rose on Friday in U.S. municipal market
trading, recouping some of the losses from Thursday's deep drop.
Spreads over Municipal Market Data's benchmark triple-A
yield scale narrowed 25 to 40 basis points for Illinois bonds
due in five to 10 years, MMD reported. At the end of trading on
Thursday, the spread on the state's 10-year bonds widened by 55
basis points to a record 335 basis points over the scale.
"I think the pendulum kind of swung too much the other way
(on Thursday)," said MMD analyst Randy Smolik.
Illinois debt was in meltdown mode on Thursday, a day after
a U.S. judge made it clear the cash-strapped state must find
more money to pay Medicaid providers despite its ongoing budget
A political stalemate between Illinois' Republican governor
and Democrats who control the legislature has left the state
without a complete budget for nearly two straight fiscal years.
Lawmakers ended their spring session on May 31 without a
deal for a third fiscal year, triggering downgrades that pushed
Illinois' credit ratings from S&P and Moody's Investors Service
to a step above junk.
Illinois has the widest so-called credit spreads over MMD's
scale of any U.S. state, indicating investors are demanding much
heftier yields for its debt.
(Reporting by Karen Pierog; Editing by Matthew Lewis)