Chicago is Downgraded by Moody’s Due to Pension Crisis

Moody’s Investors Service rating agency downgraded Chicago’s creditworthiness Tuesday, citing the city’s “massive and growing” pension hole.
After years of avoiding the issue, the city of Chicago is facing a massive spike in its annual bill for the pensions it promised current and retired workers. Next year, the city’s required contribution will more than double to $1.07 billion.

Moody’s said the pension crisis threatens “the city’s fiscal solvency,” without major tax hikes or budget cuts.
Chicago is home to one of the most troubled pension systems in the country. In total, the city’s four pension funds — for firefighters, police officers, and two for other city workers — face funding holes of nearly $20 billion.

Tuesday’s downgrades affect $8.3 billion in city debt, including $7.8 billion in general obligation bonds and $556 million in sales tax bonds. It follows previous downgrades by Moody’s and other ratings agencies.

via CNN

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.