Investment Provides Strong Returns for Illinois Taxpayers

Illinois State Treasurer Michael Frerichs today announced his office has purchased $50 million in Republic of Poland Bonds.

"These bonds provide a strong investment for the people of Illinois," Treasurer Frerichs said during a news conference at the Polish National Alliance headquarters, 6100 N. Cicero Ave. "Illinois has a unique relationship with Poland. Chicago and the suburbs are home to one of the largest Polish populations in the world. Our ties with Poland are strong, especially through trade, culture, and sister-city relationships."

Treasurer Frerichs purchased Republic of Poland Bonds to diversify the state's portfolio and achieve stable returns from a strong investment. The investment involves two purchases. One is for $25 million for four years at 4.875 percent, and the second is for $25 million for five years at a 4.625 percent. This outpaces a U.S. Treasury Note by about 46 basis points and will earn $250,000 more for the state.

The $50 million purchase is in addition to a $15 million purchase in March 2025, bringing the total investment with the Republic of Poland to $65 million.

The Illinois General Assembly approved a law establishing benchmarks that must be met for the state to purchase foreign bonds. One of the benchmarks is that a nation must meet its bond payment obligations for at least 25 years, which the Republic of Poland has done. Additionally, State Treasurer's Office guidelines require the bonds to be rated in the three highest classifications of at least two rating services.

Also Thursday, the Illinois State Treasurer's Office announced that it has renewed $10 million in Israel Bonds. The five-year renewal came at an interest rate of 6.17 percent, the highest in the last 25 years. The rate outpaces the U.S. Treasury Note by about 124 basis points (1.24%) and will earn $620,000 more for the state compared to five-year U.S. Treasuries.

"Every investment we make must serve the people of Illinois. As Treasurer, my responsibility is to protect taxpayers' money, maintain a stable and diversified portfolio, and earn the best returns possible in accordance with state law. Those returns help grow public funds that can support the services Illinois families rely on," Frerichs said.

"Our decision was based on an assessment of the bonds as a stable, safe and high-performing investment. Israel Bonds have consistently generated among the highest returns in the state portfolio for two decades," he added.

Israel has never defaulted on an interest or principal payment, so it is considered a stable and safe investment.

The state portfolio now has $90 million invested in Israel Bonds and $65 million in Republic of Poland Bonds. The $155 million in foreign bond investments represents 0.3965 percent of the $41.6 billion state portfolio.

Investment decisions are based on multiple factors: the rate of return, the stability or safety of the investment, and cash flow needs for liquidity, all while seeking to diversify the state portfolio to mitigate credit and market risk.

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About the Treasurer

The Illinois State Treasurer's Office is a powerful economic engine that invests in people to drive prosperity, development and growth throughout the state. As State Treasurer, Michael Frerichs (FRAIR'iks) is the state's Chief Investment and Banking Officer and actively manages approximately $60 billion. The investments help families pay for college and trade school; workers save for a dignified retirement; and local governments process bill payments more efficiently so they can pass along the savings to taxpayers. The office provides financial institutions with money to loan to farmers, small business owners, and qualified individuals at below-market rates because better jobs create stronger communities. The office operates the state's largest consumer-protection initiative, the missing money ICash program, which has returned a record-breaking $2.65 billion since Frerichs was elected.