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Junk or AAA? Rating Split Plagues Chicago as It Borrows Billions

  • `Dispersion in ratings just doesn't make sense,' Barclays says
  • Chicago pays up to borrow as investors fret worst-case outcome
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What’s Chicago’s risk to municipal-bond investors? It depends on which credit-rating company you ask.

In the eyes of Moody’s Investors Service, most of the $20 billion of bonds tied to Chicago are junk, as speculative as a charter school or regional hospital that could shut down. To Standard & Poor’s, the city’s park district is as credit-worthy as the U.S. government, and its sales-tax-backed debt is even safer. Only Kroll Bond Rating Agency deems the public schools worthy of an investment grade.