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Fitch Ratings Upgrades Chicago’s Outlook from Negative to Stable
Fitch Ratings has revised its outlook on Chicago, boosting it from negative to stable to reflect “the ongoing revenue recovery across the city and the significant infusion of federal fiscal aid,” easing pressure on the city’s books, Crain’s Chicago Business reported. The rating agency’s action followed a similar upgrade by Moody’s in July.
However, as rating agencies frequently warn about Chicago, it “still faces considerable financial challenges and the size of recent years’ budget gaps illustrate its sensitivity to economic setbacks.”
The city has a high and growing long-term liability burden and a heavily unionized workforce, and faces high debt and pension costs. “Meaningful cost-cutting actions will likely become more difficult to achieve over time, emphasizing the importance of Chicago’s revenue recovery,” the Fitch analysis continued.
On the plus side, Crain’s reported, the city has solid reserves totaling $1.05 billion, and it remains the economic hub for the Midwest.
- ◦Financing
- ◦Policy/Gov't
