Moody’s has downgraded Chicago, IL to Baa2 from Baa1. Moody’s cited the “highly elevated” unfunded pension liabilities and “continued growth in cost to service” these liabilities. This evaluation is despite recent reforms.
Moody’s also discusses that the City’s tax base is “significantly leveraged by the direct debt and the pension obligations.”
Moody’s continues to have a negative outlook for the City’s credit quality due to the unfunded pension liabilities and expected pressure on its operating budget.
