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The country's
third-largest public school system has set an Aug. 24 public
hearing and vote by its board of education on the general
obligation bonds.
"CPS is committed to ensuring that our students have safe,
comfortable and modern schools where they can learn," district
spokeswoman Emily Bittner said in a statement.
Escalating pension payments, drained reserves and debt
dependency have pushed CPS' credit ratings to junk. As a result,
investors have demanded hefty yields for the district's bonds.
Even a private sale of $150 million of 30-year GO bonds by CPS
last month to J.P. Morgan came at a 7.25 percent yield, which
was 513 basis points over the yield for AAA-rated bonds on
Municipal Market Data's benchmark scale.
The board of education, appointed by Chicago Mayor Rahm Emanuel,
will also be voting next week on a $5.45 billion operating
budget for fiscal 2017 that relies on optimistic assumptions of
union givebacks and added funding support from Illinois’
gridlocked state government.
(Reporting by Karen Pierog; Editing by Peter Cooney)
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