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The recent downgrade of Chicago’s credit to junk status by Moody’s Investors Service reflects not only the city’s financial troubles but also changes in the agency’s rating methodology. The adjustments by Moody’s in 2013 and 2014 put more weight on pension debt as a factor. Standard & Poor’s and Fitch Ratings, which don’t factor in pensions as heavily, rate Chicago’s credit a few steps above junk status. Follow each agency’s assessment of the city’s general obligation bonds below:
See the Chicago debt ratings from:
Move through the history of Chicago debt ratings by that agency:
Chicago’s bond rating in July 2005
Reason for rating: Analysts note the city is receiving $1.8 billion for leasing the Chicago Skyway toll bridge and plans to put $500 million in its rainy day fund.
Chicago’s bond rating in November 2010
Reason for rating: Analysts note the city is using the sale of assets, such as its parking meters, to plug budget gaps. It is also underfunding pensions.
Chicago’s bond rating in September 2013
Reason for rating: Analysts say that although the city has good financial practices, it is reluctant to adjust taxes and has been tapping its rainy day fund.
Chicago’s bond rating in May 2015
Reason for rating: Analysts note that the downgrade by Moody’s to junk status makes Chicago vulnerable to repayment demands from banks.
Chicago’s bond rating in July 2005
Reason for rating: Analysts note that the city is receiving $1.8 billion for leasing the Chicago Skyway toll bridge and plans to put $500 million in its rainy day fund.
Chicago’s bond rating in October 2009
Reason for rating: Analysts cite a large 2010 budget gap for Chicago, plus the effects of a national recession.
Chicago’s bond rating in April 2010
Reason for rating: Fitch adjusts all municipal bond ratings upward to reflect the relative safety of municipal bonds as compared with corporate bonds.
Chicago’s bond rating in August 2010
Reason for rating: Analysts say Chicago is relying on the rainy day fund to balance the budget and is reluctant to increase property taxes.
Chicago’s bond rating in October 2010
Reason for rating: Analysts note that pension obligations are growing, debt is high and the rainy day fund is depleted.
Chicago’s bond rating in November 2013
Reason for rating: Analysts say the city has not come up with any pension solutions.
Chicago’s bond rating in May 2015
Reason for rating: Analysts say a downgrade by Moody’s to junk status makes Chicago vulnerable to repayment demands from banks and could decrease the city’s borrowing options
Chicago’s bond rating in July 2005
Reason for rating: Analysts note that Chicago has a broad-based economy and a growing
property tax base.
Chicago’s bond rating in February 2006
Reason for rating: Analysts note that Chicago’s rainy day fund is growing and its property tax base is increasing.
Chicago’s bond rating in April 2010
Reason for rating: Moody’s adjusts many governments upward as part of a recalibration.
Chicago’s bond rating in August 2010
Reason for rating: Analysts say the city’s rainy day fund is depleted, its pension liabilities are growing and its debt load is above average.
Chicago’s bond rating in April 2012
Reason for rating: Analysts note that Chicago’s pension problem is growing and say the rating could drop if the new mayor does not lay out a plan to address it.
Chicago’s bond rating in April 2013
Reason for rating: Moody’s adjusts the way it calculates pension liabilities, causing the dollar amount of the liability to go up. Chicago is among several cities, including Cleveland and Minneapolis, to see its rating drop in the ensuing months.
Chicago’s bond rating in July 2013
Reason for rating: The new calculations cause Chicago, with its massive pension liability, to receive a triple downgrade. No other major city is affected so severely.
Chicago’s bond rating in January 2014
Reason for rating: Moody’s adjusts its methodology again, putting more weight on pensions and debt as factors and less weight on economic strengths such as population and property tax base.
Chicago’s bond rating in March 2014
Reason for rating: Analysts say Chicago’s pension liability has ballooned to the point where it is threatening the city’s solvency. Debt is also growing.
Chicago’s bond rating in February 2015
Reason for rating: Analysts note that pension liabilities are expected to grow even if pension reforms succeed.
Chicago’s bond rating in May 2015
Reason for rating: Analysts note that the Illinois Supreme Court struck down a state pension relief plan on May 8 and conclude that Chicago’s pension relief plan is unlikely to withstand court scrutiny.
Source: Fitch Ratings, Moody’s, Standard & Poor’s, Tribune reporting
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/* MAIN BUTTON HANDLERS */
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