Moody’s Considers Municipal Ratings Changes That Could Push Illinois Into Junk Territory

By Tyler Durden

Illinois

A few weeks ago, we expressed some level of astonishment that the rating agencies, in their infinite wisdom, decided to bestow an investment grade rating upon a new $3 billion bond issuance by the City of Chicago. Of course, this wouldn’t be such a big deal but for the fact that the state of Illinois is a financial disaster that will undoubtedly be forced into bankruptcy at some point in the future courtesy of a staggering ~$150 billion funding gap on its public pensions, a mountain of debt and $16.4 billion in accrued AP because they can’t even afford to pay their bills on a timely basis. Here are just a couple of our recent posts on these topics:

Illinois Pension Funding Ratio Sinks To 37.6% As Unfunded Liabilities Surge To $130 Billion
Illinois Unpaid Vendor Backlog Hits A New Record At Over $16 Billion
The State Of Illinois Is “Past The Point Of No Return”

Alas, as Capitol Fax notes this morning, it seems as though Moody’s may finally be waking up to the farce that is their own municipal ratings system and is currently in the process of seeking comments from market participants on …read more

Source:: ZeroHedge