Reports from credit ratings agencies aren’t typically considered thrilling reads. But the latest one from Moody’s is so ominous, it ought to give taxpayers, or at least state lawmakers elected to represent them, the shivers.
The city plans to go to the debt markets for almost $1.2 billion, including more so-called “scoop and toss” borrowing.
Moody’s Investors Service has issued a “credit negative” warning against the state in light of last Friday’s State Supreme Court ruling rejecting changes to public pensions. It’s a somewhat tepid response to the ruling, relative to the double ratings drop Moody’s applied to city of Chicago’s credit, resulting in junk bond status. In today’s report, Moody’s says the reforms could have reduced the unfunded pension liability by about $21 billion.
Moody’s Investors Service downgraded the rating on the city of Chicago’s $8.3 billion in general obligation debt to Baa2 from Baa1 on Friday, Feb. 27.