Wednesday, May 13, 2015

Moody's downgrades Chicago debt to 'junk'

Don't no which is more scary, the fact that Chicago's debt, the third largest city in the United States, has been downgraded to junk, or few either care or noticed.

States and cities, lacking the ability to print money to meet their obligations, face some rough times ahead when the economy turns down. Don't expect smart money to line up for Chicago's debt offerings in the future.

Headline: Moody's downgrades Chicago debt to 'junk' with negative outlook

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."



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