State Treasurer Expresses Relief That the Debt Ceiling Issue Has Been Resolved

  SPRINGFIELD – Aug. 2, 2011 – Illinois Treasurer Dan Rutherford is pleased that the wrangling over the debt ceiling is over because of the uncertainly it was causing for the state’s investments.  “Since this debate began, the Illinois Treasurer’s Office has been analyzing the implications to the state treasury,” said Rutherford.  “The people’s money has been safeguarded against any detrimental developments, and would have continued to be so should the federal government stop paying bills or issuing debt, because my investment team has made this a priority.” 

 Rutherford says his team will continue to carefully watch the markets for any ripple effects.  On Monday, Aug. 1, the state’s $3 billion in overnight investments captured nearly $22,000 in interest because the team was in early to take action on what became higher interest rates. 

 The next focus will be to monitor the effect on the nation’s bond rating.  “Any downgrade in the federal bond rating may impact the state’s bond rating, and then municipal bond ratings,” said Rutherford. 

 Illinois has been ranked second to last nationally in overall bond ratings. 

The current ratings are:

Moody’s                      A-1

Standard & Poor’s       A+

Fitch                          A.

 After discussing Illinois’ position on the scale of bond ratings, an analyst at Moody’s contacted the treasurer’s office to point out that its rating put Illinois at dead last.  “We don’t need a downgrade in our bond ratings, although I would prefer to not have to borrow money long-term anymore,” Rutherford explained.  “Illinois taxpayers are already on the hook for the $45 billion in borrowing debt that must be repaid, which means $10,000 for every household in the state.  We shouldn’t burden Illinoisans with any additional debt.”