Chicago’s imminent pension problem has prompted yet another rating drop for the city.
Standard & Poor’s Rating Services revised its outlook on Chicago’s A-plus general obligation rating to negative from stable, citing the city’s pension crisis.
"The outlook change reflects our view of the risks involved in how the city
will address its upcoming, large pension payments," Standard & Poor's credit analyst Helen Samuelson said in a statement.
Though the ratings for general obligation debt and sales tax debt are still investment grade, Moody's says the outlook is negative because of "formidable legal and political barriers to pension reform" in Illinois.
Like Moody’s, Standard & Poor’s cited Chicago’s $19.4 billion pension crisis, the city’s “reluctance to adjust taxes,” and mounting debt.
Illinois' credit rating, the lowest in the nation, was downgraded twice in one week in June after lawmakers failed to enact a solution to fix the state's nearly $100 billion pension shortfall.