Moody's Cuts Chicago's Credit Rating To Junk

Moody's Investors Service said Tuesday it has downgraded its credit rating on the City of Chicago to Ba1 from Baa2, a move that brands the city's debt "speculative." The move impacts $8.1 billion of Chicago's outstanding general obligation debt, $542 million of outstanding sales tax revenue debt and $268 million of motor fuel tax revenue debt. Moody's said the lower credit rating reflects Chicago's "highly elevated unfunded pension liabilities", adding "we believe that the city's options for curbing growth in its own unfunded pension liabilities have narrowed considerably." Highlighting pressure on Chicago's budget, Moody's cited a 179% jump in contributions the city is obligated to make next year to its police and fire pension funds.