Chicago Bonds Rise as State Moves to Cut City’s Pension Bill

Chicago bonds rose after the Illinois legislature cut more than $200 million from the city’s required 2016 payment into the police and fire retirement systems, a move to provide a partial reprieve from its pension burden.

Illinois’s General Assembly gave final approval Sunday to a bill that would reduce Chicago’s pension payments over the next five years. The average price of a general-obligation bond maturing in 2040 climbed 1.5 percent Monday to 91.7 cents on the dollar. That pushed the yield to 5.6 percent, the lowest since May 12, before Moody’s Investors Service announced that it cut the city’s credit rating to junk.