American Cities Increase Debt Sales

As the year draws to a close, local governments are scheduling debt sales at a 52 percent higher rate in order to raise revenues.

Illinois and New York are leading the pack, offering more than $4 billion in debt sales to help troubled budgets, Bloomberg reports.

The leap in sales is due to the expiration of the alternative-minimum-tax exemption and the Build American Bond program which are set to expire at the year's end, according to Bloomberg. As a result of the market movement, yields on 10-year AAA taxes rose 30 basis points in October.

Chicago also plans to sell $804 million in debt this week, including $214 million in Build America bonds, the news source says.

"Chicago gets penalized for being in a state that’s having such enormous problems as it’s having,” Howard Cure of Evercore Wealth Management told the news source. “Illinois is going to have to issue debt, and I’m sure the city isn’t going to want to be dragged down by the state."

Overall, states and municipalities plan to borrow around $13 billion this year. By comparison, sales in 2009 were in excess of $8 billion.