The Bond Buyer article reports that the City of Chicago has asked Moody’s to withdraw its Ba1 ratings on all of its debt. Moody’s has declined to withdraw the ratings.
Standard & Poor’s has the City rated BBB.
Chicago mayor Emanuel stated that “It has become increasingly clear that Moody’s rating methodology and agenda are far from objective and independent…” In Emanuel’s opinion Moody’s has not recognized “…measurable progress by the City to confront the fiscal challenges…”
Market data continues to side with the Moody’s rating showing spreads of 250 to 300 basis points to the Municipal Market Data’s top-rated benchmark according to the Bond Buyer article. This spread level is consistent with “junk” status and contrasts to spreads of 95 basis points for BBB vs. AAA. This implies that the market is skeptical of the investment grade rating of Standard & Poor’s.
