* Karen Pierog…

Illinois plans to sell $550 million of bonds on June 16, the governor’s office said on Monday, as the state struggles through an unprecedented budget impasse that has heightened concerns about its financial health.

The tax-exempt general obligation bond sale, which will be competitively bid, comes after state lawmakers ended their spring session on May 31 without passing budgets for the current and next fiscal years.

The deal’s prospectus, released late on Monday, acknowledged Illinois’ financial condition has been “materially adversely affected” by the impasse between Republican Governor Bruce Rauner and Democrats who control the legislature. […]

Credit rating agencies have warned Illinois, which has the lowest bond ratings among the 50 states, of further downgrades if it fails to tackle a $111 billion unfunded pension liability and huge structural budget deficit.

Illinois’ sold $480 million of bonds in January, the state’s first deal in nearly two years.