Remember that Illinois bond that came to market the day after Rod Blagojevich’s arrest? Its addendum had to acknowledge the arrest of the state governor, and we wondered what kind of affect it would have on the state’s ability to raise money. Turns out, it did hurt. Imagine that. The governor gets into a scandal (just the latest in a long string) and investors become hesitant to loan the state money.
WSJ: Amid the scandal plaguing the governorship of of the state, investors in Illinois municipal bonds were mostly scared off from investing in $1.4 billion of state bonds used to pay state employees and meet other obligations.
Illinois got the deal done Tuesday after delaying it last Thursday, but only because J.P. Morgan Chase & Co. bought the entire $1.4 billion at a cost to the state of about 4% in an auction that included bids as high as 8.5%, according to people familiar with the deal.
Investors balked at the deal in part due to the charges of fraud and bribery brought against the state’s governor Rod R. Blagojevich, a notice about which leads the official notice for the offering that investors would review.
Meanwhile, Blago is still in his office, and with each passing day it looks more likely that he’ll tough it out. Here’s the addendum, once again: