ML-Implode News - Move over, Puerto Rico. Illinois, New Jersey and other states face municipal bond woes, too

Puerto Rico's partial default on its bonds this month shook the muni market, and particularly some funds with big holdings in the bonds, which are free from state and local taxes across the country. But other muni issuers are in rough shape as well, even though most states' balance sheets are improving, says Standard & Poor's.
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New Jersey boasts the next-worst rating for its general obligation bonds: an A rating, with a negative outlook. The state's underfunded pensions and large outstanding debt were behind the relatively low rating.

Even though states can't declare bankruptcy, their bond prices can get smacked when they get a ratings downgrade. Nevertheless, some funds have taken significant stakes in Illinois and New Jersey debt, according to Morningstar, the Chicago investment trackers.''

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Move over, Puerto Rico. Illinois, New Jersey and other states face municipal bond woes, too