This time by Fitch,:
Rating Action Commentary...MORE
Fitch Rates Chicago, IL's $503M GOs Ser 2026A (Taxable) and Ser 2026B 'BBB+'; Downgrades Outstanding
Wed 25 Feb, 2026 - 5:14 PM ET
Fitch Ratings - New York - 25 Feb 2026: Fitch Ratings has assigned a 'BBB+' rating to the following general obligation (GO) bonds to be issued by the city of Chicago, Illinois:
--$487,515,000 GO bonds, taxable series 2026A;
--$15,480,000 GO bonds, series 2026B.
About $166 million of the bond proceeds will be used to fund firefighter collectively bargained retroactive wage increases. Another $283.3 million will fund settlement and judgment costs against the city as a condition to the resolution of litigation or threatened litigation. Proceeds will also be used to fund capitalized interest and costs of issuance. The bonds are expected to price in mid-March via negotiation.
Fitch has downgraded Chicago's Issuer Default Rating (IDR) and outstanding GO bonds to 'BBB+' from 'A-'. Fitch has also downgraded the Sales Tax Securitization Corporation's (STSC) outstanding sales tax securitization bonds (senior lien) to 'AA+' from 'AAA'. Fitch has affirmed STSC's outstanding second lien sales tax securitization bonds at 'AA-'.
The Rating Outlook remains Negative on Chicago's IDR, GO bonds and STSC sales tax securitization bonds (senior lien). The Outlook on the STSC second lien sales tax securitization bonds is Stable.
Hat Tip:
NEW: Two ratings agencies hit Chicago with credit downgrades today.
— Austin Berg (@Austin__Berg) February 26, 2026
Why?
One major reason: The $11B in pension sweeteners signed into law by Gov. JB Pritzker following token opposition from Chicago Mayor Brandon Johnson’s administration last year.
I predicted this would… https://t.co/ykQm3mnKum pic.twitter.com/CyJhgSEsST
And at the Chicago Tribune, February 27:
Editorial: Mayor Brandon Johnson is leaving his successors with a financial ash heap. It’s worse than we thought.
Previously:
"How Debt Ate Chicago: Mounting liabilities are the greatest threat to the city’s survival."
Warren Buffett: Avoid States With Large Unfunded Pension Liabilities
....The rest of the country has to begin planning now, immediately, how they will fight being forced to pay for Chicago's political and criminal corruption. Because you know, as sure as this old world keeps spinning around, that the Chicago politicians and their corrupt buddies in Congress, from many states but in particular New York and California, that they are already planning how to shake down the people who didn't cause this mess.
Chicago has had 90 years to get things just the way they wanted them. This is what they created.
And the Chicago mob and their ilk will run the shakedown through any or all of the institutions they can corrupt or control, the House of Representatives that holds the power of the purse, the Presidency and its powers of executive orders and the bureaucrats in its administrative state, including but not limited to the U.S. Treasury, and finally the Federal Reserve which seems to have some funny ideas about buying muni. paper....
TL;dr:
...Mr. Buffett's thinking on dealing with these swine can be boiled down to two words: Do NOT.
Do not do business with them unless you have good collateral, in hand. Do not acquiesce to their pleading, cajoling, threats of force or retribution. Do not "be nice" and entertain, or in any way agree with, their mental illness and social depravity.
Do not be a cuckold to those corrupt bastards in Cook County.
And within the next ten years this most dysfunctional state will want the rest of the country to pay for what the state, county and municipal politicians created over the last ninety years....
*****
Good timing. If interested see also yesterday's "Chicago’s pension funding crisis is a century in the making. 5 grad students could change that" posted within an hour of the above. Great minds and all that. Or maybe just observant.
There is no hope but it is probably good that they are trying.
I say "no hope" because private sector employers and employees are now indentured servants of the public employee pension plans. And as more and more people realize this and flee (how much money did Citadel take out of the tax base when they went to Florida?) those that remain behind will literally be left to foot the bill.
All so the party in power the last 90 years could buy votes with other peoples money....
Over the years, Warren Buffet has obliquely commented on Illinois without mentioning it by name. From "Citi Shuts Muni Business That Once Was Envy of Rivals" (plus Warren Buffet gives a class on muni realities):
Can you imagine personally buying a 20-year City of Chicago general obligation bond?
Airports are a bit different because the airport authority is taxing transients who don't vote.
But they are dependent on people wanting to travel to or through that airport so the city's general economy is a factor. The city on the other hand....
Here's Mr, Buffett in the 2008 Berkshire Hathaway annual report, wrapped by a February 2019 post:
Mr. Buffett, through his insurance companies, guarantees a few of the country's municipal bonds. Muni holders are often in conflict with public employee unions and/or public employee pension overseers, especially in the event of a municipal bankruptcy.
These guarantees usually take the form of credit default swaps.
In addition Berkshire Hathaway carries a small amount of munis as an asset on the consolidated balance sheet.Warren pays attention to this stuff. His 2008 Letter to Shareholders is a mini-masters course in moral hazard in the muni biz. Some copied out after the jump*****The class begins on page 13 of the 2008 letter....
