#PJNET Moody's downgrades #Chicago #CREDIT Rating to 'junk' ! @NBC

Everett Rosenfeld | @Ev_Rosenfeld

14 Hours Ago

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Moody's downgraded Chicago's credit rating down to junk level "Ba1" from "Baa2."

The announcement, which the ratings agency released Tuesday afternoon, cited a recent Illinois court ruling voiding state pension reforms. Moody's said it saw a negative outlook for the city's credit.

Following that May court decision, Moody's said it believes that "the city's options for curbing growth in its own unfunded pension liabilities have narrowed considerably."

Read MoreMunicipal money matters: Why Chicago is not the next Detroit

"Whether or not the current statutes that govern Chicago's pension plans stand, we expect the costs of servicing Chicago's unfunded liabilities will grow, placing significant strain on the city's financial operations absent commensurate growth in revenue and/or reductions in other expenditures," the agency said in a release.

The downgrade affected $8.9 billion of general obligation, sales, and motor fuel tax debt, according to Moody's.

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#Chicago BONDS #CREDIT Almost JUNK !!! @FoxChicago

Posted: Feb 28, 2015 9:48 AM CSTUpdated: Feb 28, 2015 9:48 AM CST

 

CHICAGO (Sun-Times Media Wire) -

Chicago's plummeting bond rating took center stage in the race for mayor Friday after a Wall Street rating agency dropped it another notch — to two levels above junk status — citing Chicago's $20 billion pension crisis.

The decision by Moody's Investors Service to drop Chicago's rating for a fifth time under Mayor Rahm Emanuel — from Baa1 to Baa2 — may cost the City of Chicago tens of millions of dollars, the Sun-Times is reporting.

As a result of the downgrade, the city is on the hook to pony up $58 million under agreements covering existing debt, according to Laurence Msall, president of the Civic Federation. While city officials can try to renegotiate those agreements, a City Hall spokeswoman had no immediate comment on the matter Friday night.

In addition, the taxpayers “will pay a significant premium for future debt,” including both short-term debt used to fund operations and long-term borrowing used to fix and build city infrastructure.

But the entire cost of the downgrade “will not be known until the city issues new debt,” Msall said.

He noted that even before the downgrade, the state of Illinois had the lowest credit of all 50 states, and the city of Chicago had the worst credit rating of any major municipality except Detroit.

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