Moody's Cuts Chicago's Ratings Due to Pensions

Outlook is negative

Moody's Investors Service lowered on Wednesday Chicago's general obligation and sales tax ratings to A3 from Aa3 due to the city's large and growing pension liabilities and budget pressures related to them.

The move affects $8.2 billion of Chicago's general obligation and sales tax debt, Moody's said in a statement, adding that its outlook is negative.

"The current administration has made efforts to reduce costs and achieve operational efficiencies, but the magnitude of the city's pension obligations has precluded any meaningful financial improvements," Moody's said.