While most eyes are on the highly leveraged European countries, especially Spain over the past week, back here in the US, Illinois today is close to passing California as the most troubled municipal credit in the country as measured solely by their 5 yr CDS. Illinois 5 yr CDS is up 4 bps today to 295 bps, a record high and up 70 bps in just the past two weeks. California is trading at 299 bps, higher by 2 bps on the day and up about 50 bps in the past two weeks. It does though remain well off its record high of 460 bps back in Dec ’08. Both municipalities are closing in on Bulgaria at 320 bps, Croatia at 300 bps, Hungary at 318 bps, and Lebanon and Portugal both at 310 bps.
