Chicago nears fiscal free fall with latest downgrade

by
February 27, 2015

CHICAGO – Chicago drew closer to a fiscal free fall on Friday with a rating downgrade from Moody’s Investors Service that could trigger the immediate termination of four interest-rate swap agreements, costing the city about $58 million and raising the prospect of more broken swaps contracts.

The downgrade to Baa2, just two steps above junk, and a warning the rating could fall further still, means the third-biggest U.S. city could face even higher costs in the future if banks choose to terminate other interest-rate hedges against fluctuations in interest rates. All told, Chicago holds swaps contracts covering $2.67 billion in debt, according to a disclosure late last year.

“This is an unfortunate wake-up call for anyone still asleep over the fiscal cliff facing the city of Chicago,” said Laurence Msall, president of the Chicago-based government finance watchdog, The Civic Federation.

  • ijohnc1

    Gee! What a surprise, Chi-town, going down, unable to rise from the ashes, do not be taken aback when Boehner and crew bail them out.
    “GOLLY”….Gomer Pyle

  • The redhawk

    Well as Predicted …. DETROT First, Chicago Second and New York may be NEXT….Wherever DUMMIE C RATS run Cites/States …….. FINANCIAL DISASTERS and CORRUPTION SEEM TO BE AT HAND….

  • James in Texas

    Where, Oh Where is Mrs. O’Leary’s cow when you need it? Chicago is the next “Detroit in-waiting, Period!”

    • The redhawk

      You need more tat Mrs O’Leary this time…. Steel and Concrete will not burn fast enough!!!
      Is there a HOSE BIG ENOUGH TI FLUSH THE BARN aka RAHM’S IDIOTS CELL?

      • James in Texas

        I was on a job-site in Chicago in 1991, it was the longest 7 months of my life, Period. And, “No” hose is big enough to flush all of the corruption out of Chicago, Period!

        • The redhawk

          However reversing the course of the Chicago Green river upstream and let the Lake Waters start at Whacker and inundate the City , might Drown most of the RATS????

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