Here Are The 11 U.S. States Most Likely To Default And Need A Government Bailout

pennsylvania

States are at the centre of the unemployment crisis, and that’s because many have serious debt problems, impeding their ability to keep workers employed.

But just how bad are those debt problems? It could drive some states to default if conditions get worse or force a federal government bailout.

Here’s CMA Datavision‘s list of the worst state risks, ranked by cumulative probability of default (CPD). That default risk is measured through fluctuations in the state’s CDS rating, and the height of that rating. The spread of each 10-year CDS is also listed as well as the implied credit rating of the state.

#11 Pennsylvania

Cumulative Probability of Default (CPD): 10.7%

CDS Mid 10 Year (in bps): 126.8

Implied Credit Rating: aa-

Source: CMA Datavision

#10 Florida

Cumulative Probability of Default (CPD): 10.8%

CDS Mid 10 Year (in bps): 130.0

Implied Credit Rating: aa-

Source: CMA Datavision

#9 Ohio

Cumulative Probability of Default (CPD): 11.2%

CDS Mid 10 Year (in bps): 134.0

Implied Credit Rating: a+

Source: CMA Datavision

#8 Massachusetts

Cumulative Probability of Default (CPD): 11.2%

CDS Mid 10 Year (in bps): 134.5

Implied Credit Rating: a+

Source: CMA Datavision

#7 Rhode Island

Cumulative Probability of Default (CPD): 12.4%

CDS Mid 10 Year (in bps): 148.5

Implied Credit Rating: bb+

Source: CMA Datavision

#6 New York

Cumulative Probability of Default (CPD): 15.9%

CDS Mid 10 Year (in bps): 194.0

Implied Credit Rating: bb+

Source: CMA Datavision

#5 Nevada

Cumulative Probability of Default (CPD): 16.7%

CDS Mid 10 Year (in bps): 205.0

Implied Credit Rating: bb+

Source: CMA Datavision

#4 New Jersey

Cumulative Probability of Default (CPD): 17.1%

CDS Mid 10 Year (in bps): 210.0

Implied Credit Rating: bb+

Source: CMA Datavision

#3 Michigan

Cumulative Probability of Default (CPD): 18.8%

CDS Mid 10 Year (in bps): 237.0

Implied Credit Rating: bb

Source: CMA Datavision

#2 California

Cumulative Probability of Default (CPD): 20.9%

CDS Mid 10 Year (in bps): 260.0

Implied Credit Rating: bb-

Source: CMA Datavision

#1 Illinois

Cumulative Probability of Default (CPD): 21.0%

CDS Mid 10 Year (in bps): 260.0

Implied Credit Rating: bb-

Source: CMA Datavision

And don't forget, this isn't just a state problem...

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