Chicago, the nation’s third largest city, has had its credit rating lowered three steps – based on $8 billion of debt - by Fitch Ratings, which pointedly cited the Windy City’s growing unfunded pension liability.
Via Bloomberg:
Fitch cut the rating on $8 billion of Chicago’s general-obligation bonds to A- from AA-, the New York-based company said today in a statement. It also took the same action on $500 million of debt backed by the Windy City’s sales taxes.
It’s the second three-step rating cut for Chicago since July, when Moody’s Investors Service lowered its grade to A3, the fourth-lowest investment-quality category, citing pension burdens and the costs of crime.
Bloomberg reports that Chicago, a city of more than 2.7 million residents, is projecting a budget deficit of as much as $1 billion in 2015 unless the Illinois legislature restructures the public-pension system, which is a state creation.
State lawmakers adjourned their fall session yesterday without taking any action.
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