Illinois will sell $500 million of general obligation bonds on Jan. 30 in its first deal since a state legislative session ended this month without any resolution to a huge unfunded public pension liability, a state official said on Tuesday.
John Sinsheimer, the state's capital markets director, said the 25-year bonds to fund capital projects should benefit from the light supply of deals so far in 2013. However, he added the new bonds could be hurt by inaction on pension reform.
Governor Pat Quinn, who has pushed for action on pensions, has warned that the state could pay higher borrowing costs for its ongoing multibillion-dollar capital program if rating agencies continue to pound Illinois' credit rating lower.
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