Moody's Investors Service has slashed Chicago's general obligation and sales tax ratings by three notches to A3 from Aa3 due to the city's large and growing pension liabilities and related budget troubles.
The move affects $8.2 billion of Chicago's general obligation and sales tax debt, Moody's said in a statement. It will make it more expensive for the city to borrow money, and Moody's said it may further downgrade the ratings if conditions don't improve.
"The current administration has made efforts to reduce costs and achieve operational efficiency, but the magnitude of the city's pension obligations has precluded any meaningful financial improvements," Moody's said.
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