Sub-junk: Moody's lowers Chicago Public Schools credit rating again

Belding Elementary, Chicago's
Northwest Side

When a credit rating is lowered to junk--it can't get any lower, right?

Wrong!

From the Chicago Sun-Times:

The same agency that gave a "junk" status credit rating to Chicago Public Schools in May has dropped the cash-strapped school system’s rating lower still.

Citing "the precarious liquidity position of the district" and a 2016 budget that assumes $480 million in state funding not yet appropriated, Moody’s Investors Service dropped CPS' rating from Ba3 to B1 on Monday.

The rating also reflects "the district's steadily escalating pension contributions and recent use of reserves to fund recurring contributions," according to a Moody's statement. "The rating further reflects the district’s elevated debt levels. Favorably, CPS benefits from a large tax base and diverse economy."

Chicago's tax base is large--for now.

Moody's warns of future downgrades.

President Obama chose CPS' CEO, Arne Duncan, to be the Department of Education.

Heckuva a choice, Barack!