CHICAGO (Sun-Times Media Wire) -
A major credit-rating agency announced Thursday it downgraded the Chicago Board of Education's $6.4 billion debt.
Moody's Investor Service lowered the Chicago Public Schools' rating to A2, referencing the school district's looming $1 billion budget gap for the fiscal year 2014.
The rating reduction "reflects a weakened financial profile" spurred by the depletion of reserves, an approaching increase in pension payments and delayed payment of state money.
Moody's also cited a "moderate increase in unbudgeted salary costs" negotiated during the recent strike by the Chicago Teacher's Union as a factor in the rating change.
The rating agency also said the duration of the strike indicates that labor relation could continue to influence the rating.
A change in the credit rating can make it more expensive for a government agency to borrow.
The latest downgrade comes on the heels of a July reduction in the CPS' financial outlook from stable to negative.
