Moody’s Cuts Chicago Rating Amid Crime, Pension Liability

Mounting pension liabilities have cost Chicago another cut in its credit standing as Moody’s Investors Service reduced the general-obligation debt rating for the nation’s third-largest city by three steps to A3, citing a $36 billion retirement-fund deficit and “unrelenting public safety demands” on the budget.

Moody’s also placed the city’s $7.7 billion in general-obligation bonds under a negative outlook, indicating another cut may be made. The moves follow a review that began in April, when the New York-based rating company said it was reevaluating the credit effects of municipal retirement obligations.