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Chicagoans' Cost to Exit Swap Agreements Approaches $300 Million

  • City is selling $439 million in wastewater debt Wednesday
  • Borrowing will convert variable-rate sewer debt to fixed-rate
Updated on

Chicago’s attempt to clean up a legacy of wrong-way bets on interest rates is costing taxpayers at least $270 million since Moody’s Investors Service cut its rating to junk in May, city documents show.

The payouts to Wall Street banks, which come as the Windy City considers a record tax increase to cover pension costs, are more than the city spends a year to collect garbage at 613,000 homes, and could cover the cost of hiring more than 2,000 police officers. The pain isn’t over yet as officials plan another round of debt restructuring that could cost $110 million to unwind derivatives on its water debt early next year.