Chicago’s Wall Street Reprieve Spurs Rally Before Junk-Bond Sale
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Wall Street is giving the Second City a second chance.
The price of Chicago’s most-actively traded bond has erased almost all of the decline that followed Moody’s Investors Service’s May 12 decision to cut the city to junk. Buyer confidence has been bolstered because banks aren’t seeking penalties related to the downgrade, anticipating Chicago would be able to sell $674 million of general obligations Wednesday to refinance debt. Underwriters lowered the yields on some bonds due to demand from investors.