Chicago has just received an economic boost, with Mayor Brandon Johnson revealing that Fitch Ratings, Inc. has upgraded the city's credit ratings. The General Obligation (GO) bonds now sit at 'A-' up from 'BBB+', and Chicago’s Sales Tax Securitization Corporation’s (STSC) senior lien bonds have leaped to 'AAA' from 'AA+'. A stable outlook remains for both categories, hinting at a steady financial trajectory for the city.
According to a statement obtained by the City of Chicago's official website, Mayor Johnson expressed gratitude for the upgrades, linking them to Chicago's commitment to sound fiscal management and its economic might. However, it is the residents, who should anticipate the real benefits of this economic elevation, as lower borrowing costs from these upgrades may funnel additional capital into city services. Such injections of funding are crucial for enhancing the quality of life in urban landscapes.
Fitch's revision aligns with the new U.S. Public Finance Local Government Rating Criteria they've adopted. Citing Chicago's steadfast approach to fiscal responsibility and structural problem-solving in budget challenges, Fitch acknowledged the city's economic and demographic positives. In 2022, Chicago's population and economic diversity were deemed robust enough to secure the highest size/diversification category by Fitch's standards.
Chief Financial Officer Jill Jaworski highlighted the significance of the upgrades, stating, "For years, we have believed that rating agencies undervalue the strength and potential of Chicago." With Fitch's revised criteria, these sentiments have now found resonance in tangible form. The rating increase not only figures into lower borrowing costs but opens up the city's bonds to a wider array of investors. Caught in the wake of financial improvement, the city's infrastructure, public safety, and education stand to benefit from the potential influx of investment.
