Chicago Public Schools debt was recently rated one step above junk by Moody’s and comments by Illinois Governor Rauner that the Chicago Public Schools may need bankruptcy protection have combined to push up yields on the School System’s pending bond sale.
Budget deficits, the strain of an ever increasing unfunded pension liability and continued use of strategies to shift revenues forward continue to plague the Chicago Public Schools. While Chapter 9 bankruptcy is not currently available to Illinois municipalities, the Illinois House is considering a bill to make Chapter 9 bankruptcy available.
Adding to the woes of the School System, CEO Barbara Byrd-Bennett took leave on April 17 after the school board was served with federal grand jury subpoenas seeking records about contracts.
