Chicago Bond Penalty Widens as Mayor Weighs How to Close Deficit

Investors are demanding higher premiums to buy Chicago muni bonds as Mayor Brandon Johnson wades through a myriad of options to close a deficit that tops $1 billion for the year ahead.

Spreads on several tax-exempt Chicago bonds that were the most-actively-traded this week have widened recently, according to trading data compiled by Bloomberg. For debt due in 2042, the spread above benchmark muni securities jumped to 1.54 percentage points on Thursday, up from 1.17 percentage points a year ago, the data show. The price of the security — the city’s most frequently traded bond this week — fell to ...