Credit rating agency Moody’s has downgraded the rating for Chicago placing it the lowest of any major city except Detroit.
The downgrade by Moody’s cited the city’s unfunded pension liabilities.
The agency announced Tuesday it’s lowering the rating on $8.3 billion in debt from A3 to Baa1, putting it only three notches above junk-bond status.
Supporters of Chicago Mayor Rahm Emmanuel will say that the Chicago’s financial problems are the result of the fiscal irresponsibility of former Mayor Richard M. Daly.
Detractors will say the problem is the result of Mayor Rahm Emmanuel’s failing fiscal policies.
Moody’s gave Chicago a negative outlook indicating another downgrade could occur if there’s no pension fix. Moody’s says the rating “reflects the city’s massive and growing unfunded pension liabilities.”
The lower rating means the city will have to pay high interest rates.