Chicago became the latest U.S. city to see its financial prospects dragged down by its pension obligations when Standard & Poor's changed its outlook to negative from stable, while affirming its A-plus bond rating.
"The outlook change reflects our view of the risks involved in how the city will address its upcoming, large pension payments," Standard & Poor's credit analyst Helen Samuelson, said in a statement.
While the city scored high by some measures – strong cash levels to pay debt, budgetary flexibility and a broad and diverse economy – S&P noted that Chicago's unfunded pension liabilities had grown from $11.9 billion in 2011 to $19.4 billion a year later. The city's annual pension payment is projected to hit over $1 billion in 2015, nearly double the current amount.
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