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WNIJ's summary of news items around our state.

Illinois gets 'rock bottom' rate on $1.5 billion in bonds

The state of Illinois didn’t have any trouble selling $1.5 billion in debt to repay a federal loan for its unemployment-insurance program, the Wall Street Journal reported.

Crain’s Chicago Businesssaid interest rates for the three-series offering were “rock bottom,” thanks to the dedicated stream of unemployment insurance taxes backing them up -- separate from Illinois' general fund. Also, any extra money from the tax can be used only to pay off the debt, providing extra protection for investors.

People familiar with the deal said it received many more orders than there were bonds available.

Because the bonds are from cash-strapped Illinois, "it's got a little bit of extra yield in a market where there is none," Blake Miller, managing director at Neuberger Berman, told the WSJ. But since they are being sold by the state's Department of Employment Security, "it's also a credit that firms don't already own, so the demand is crazy high."

Illinois debt sale was rated double-A-plus by Fitch Ratings and double-A by Standard & Poor's. This deal allows Illinois to refinance federal loans at roughly three percent.

In an interview last week, John Sinsheimer, Illinois' capital-markets director, said the state hoped to secure an interest rate on its municipal-bond deal below the roughly 3% rate on its federal loan.

"We want to get ahead of the curve," in issuing bonds, as a "flood" of this unemployment insurance debt from other states could follow, Sinsheimer said.

According to the U.S. Department of Labor, 22 states, including Illinois, owed $30.2 billion to the federal government as of July 11. States borrowed the money during the recession to keep their unemployment-insurance programs afloat.