March 4 Moody's Investors Service on Tuesday downgraded Chicago's general obligation and sales tax revenue bond ratings one notch to Baa1 from A3, citing the city's growing unfunded pension liabilities, which threaten its fiscal solvency.
The ratings agency also downgraded the city's water and sewer senior lien revenue bond ratings to A2 from A1, and water and sewer second lien revenue bond ratings to A3 from A2.
The outlook on the lowered ratings is negative, Moody's said.
"The negative outlook reflects our expectation that, absent a commitment to significantly increase revenue and/or materially restructure accrued pension liabilities to reduce costs, the city's credit quality will likely weaken," Moody's said in a statement. (Moody's statement:)