With a second credit downgrade this month, Illinois has overtaken California as the worst credit risk in the United States, according to Senator Tim Bivins.

Also this week, several bills were signed into law including pay day loan reform, research and development tax credits, and STAR bonds.

The credit default swap spread for the Illinois general obligation bonds increased to 313 basis points for a five-year contract, which means a bondholder must pay over 3% of the bond’s face value per year to be insured against default. California’s five-year credit default swap is currently at 293.

Eight credit downgrades have occurred under Governor Pat Quinn compared to only three under former Governor Rod Blagojevich. Illinois has been downgraded 17 times in its history, with almost half of those occurring during Quinn’s one-and-a-half years in office.

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