“It’s An Attack On Higher Education”: Connecticut Seeks To Tax Yale Endowment As Plug To Surging Deficit

One week ago, we observed an unexpected spike in the yield spread of Connecticut bonds over AAA-rate munis:

There were two specific catalysts for the spike in yield:
First was last week’s disappointing bond auction, as a result of which CT bond risk has spiked to 65bps over the benchmark, a record spread demanded by investors to take CT repayment risk. In the process CT, one of the states historically most preferred by the wealthy hedge fund community, became the 4th riskiest US state after NJ, IL, and PA. As Bloomberg noted at the time, the state’s $550 million general-obligation sale on March 17, which included debt due in 2026, priced to yield 2.52 percent, compared with an expected 2.37 percent based on Bloomberg’s Connecticut index.

This post was published at Zero Hedge on 03/27/2016 –.