Chicago May Owe Wall Street $58 Million After Moody’s Rating Cut
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Chicago may have to pay $58 million to unwind interest-rate swaps after Moody’s Investors Service cut the city’s credit rating within two steps of junk because of mounting pension liabilities.
The reduction on Friday to Baa2 affects $8.3 billion of general-obligation bonds, which were already the lowest-rated among the 90 biggest U.S. cities, excluding Detroit. The outlook remains negative, signaling more cuts are possible, underscoring the city’s fiscal stress as Mayor Rahm Emanuel faces a runoff election.