By: Mark Glennon*
S&P yesterday downgraded Chicago’s general obligation bonds to A- from A+, which the agency said was three notches above “junk” level. That’s comparatively mild since, on Tuesday, Moody’s Investors Service on Tuesday pushed Chicago’s credit rating into its “junk” category.
Chicago plans to price offerings of $201 million and $182 million on May 19, as reported yesterday by Bloomberg.
And guess who is one of the two agencies slated to rate the new offering, hired by the city? S&P.
You take it from here. What a system.
We’ve been saying that, when books are written about this crisis, one should be titled something like, Why Illinois Slept. There will be chapters about politicians and the media, of course, but a big one will be about the municipal bond industry.
*Mark Glennon is founder of WirePoints. Opinions expressed are his own.
Expect no retraction or apology. This what they do.
The state’s existing buyout program for its own pensions is the precedent for Chicago, which should be a warning: Look out for similar exaggerated claims and shoddy analysis.