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THE BOND BUYER: Illinois spreads shrink as federal aid headwinds shift

January 08, 2021

Illinois spread penalties narrowed this week as impending Democratic control of the Senate brightened prospects for long-stalled federal aid for state and local governments to help plug COVID-19 pandemic-related budget holes. "The reason spreads are narrowing is that the day of fiscal reckoning has been delayed," said Brian Battle, director of trading at Chicago-based Performance Trust Capital Partners. "It's all about stimulus and has everything to do with having Democratic control of the Senate and the House and a Democratic administration. Illinois is an injured credit and the expectation is now that they are going to get help from D.C."

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