Mayor Rahm Emanuel will ask the city council next week to allow Chicago to refinance about $1.1 billion of debt as part of his plan to ease a deepening financial crisis as pension liabilities threaten the municipality’s solvency.
The conversion of short-term lines of credit into long-term debt is part of Emanuel’s plan laid out in April to mend the third-most-populous city’s finances.
The planned refinancing was reported earlier by The Bond Buyer.
“The upcoming issuance -- which converts bad deals from the past from short-term debt into more stable, long-term debt - - is one more step toward getting the city’s fiscal house back in order,” according to the city’s statement e-mailed Thursday from Kelley Quinn, a spokeswoman.
The move follows Chicago’s conversion of all of its variable-rate general-obligation and sales-tax debt to fixed rate last week. Chicago has been refinancing since Moody’s Investors Service cut its credit rating to junk in May, leaving the city with a lower grade than any other major city except Detroit.