Moody's downgrades Chicago's rating over pensions
Source: AP
BY JASON KEYSER
CHICAGO (AP) -- Moody's Investors Service has downgraded Chicago's credit rating to two levels above junk status, citing the city's $20 billion mountain of unfunded pension liabilities.
The agency said Friday that it lowered the rating on $8.3 billion in general obligation debt from Baa1 to Baa2. Moody's also maintained its negative outlook for Chicago, indicating another downgrade could occur even if recent efforts to address the city's pension problems survive legal challenges.
"Regardless of outcome of the legal challenges to pension reforms, we expect Chicago's unfunded pension liabilities - and the costs of servicing those liabilities - to continue to grow, placing significant strain on the city's financial operations," Moody's said.
The announcement thrust the pension issue back to the center of Chicago's mayoral campaign. Mayor Rahm Emanuel faces Cook County Commissioner Jesus Garcia in an April 7 runoff after failing to get enough votes for an outright win on Tuesday, despite millions of dollars in campaign funds and support from business leaders.
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= new reply since forum marked as read
He will probably junk the pensions and turn the remnants over to Wall St.
