Standard & Poor's has lowered the credit rating threshold required to terminate its swap deal with Illinois. The renegotiated deal makes the termination of the interest rate swap agreement, which could cost Illinois up to $99.2m, less likely; however, the termination will become a reality if the state's ratings falls below Ba1 with Moody's or BB-plus with Deutsche Bank. Termination of the deal is appearing more likely as ratings dropped further last week while the state implements new reforms in an attempt to avoid a multi-million dollar payout to banks.
Deutsche Bank has lowered the credit rating threshold required to terminate its swap deal with Illinois. The renegotiated deal makes the termination of the interest rate swap agreement, which could cost Illinois up to $99.2m, less likely; however, the termination will become a reality if the state's ratings falls below Ba1 with Moody's or BB-plus with Standard & Poor's. Termination of the deal is appearing more likely as ratings dropped further last week while the state implements new reforms in an attempt to avoid a multi-million dollar payout to banks.