Fitch downgrades Chicago bond ratings

SPRINGFIELD, Ill. (AP) -- Fitch Ratings has downgraded the credit worthiness of Chicago's bond debt because of its public pension problems.

Fitch dropped the rating from AA- to A- on $8 billion in general obligation bonds, backed by property taxes.

It also dropped the rating on $497 million in sales tax bonds — paid for by both the city's local sales tax and its share of the state sales tax. And the rating was downgraded on $200 million in commercial paper notes, financed by a general obligation pledge from any available city fund.

Friday's downgrade stems from "the lack of meaningful solutions" to the city's pension situation. City and fire pension programs have no more than 30 percent of the money needed to cover obligations.

The downgrade makes it more expensive to borrow money.

Via Yahoo FInance

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Fitch puts US AAA rating on rating watch negative

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Fitch puts US credit rating on negative watch

Tuesday, 15 Oct 2013 | 4:46 PM ET

Fitch has put the U.S. credit rating on negative watch, reports CNBC's Dominic Chu.

Fitch Ratings put the US government's "AAA" credit rating on 'rating watch negative' Tuesday, saying that the standstill on the U.S. debt ceiling negotiations risks undermining the effectiveness of the country's government and political institutions.

U.S. stock index futures fell.

"Although Fitch continues to believe that the debt ceiling will be raised soon, the political brinkmanship and reduced financing flexibility could increase the risk of a U.S. default," the rating agency wrote in a statement.

S&P 500 futures fell 9.6 points while Dow Jones industrial average futures sank 60 points and Nasdaq 100 futures fell 7.5 points. 

A Treasury Department spokesperson said the Fitch move reflected an urgent need for Congress to act on the debt ceiling.

Earlier today Senate Majority Leader Harry Reid lashed out at House Republicans, shortly after the collapse of a rival GOP proposal.

He warned at the time that the U.S. credit ratings could be downgraded as soon as Tuesday night.

Via: CNBC

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