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CHICAGO (AP) — Another bond rating service has lowered the Chicago Board of Education's investment grade rating to junk status.
Fitch Ratings on Monday cited a looming annual budget deficit of more than $1 billion for the move. Chicago officials had no immediate comment on Fitch's move.
In a statement explaining its action, Fitch noted the school district faces a key test in October, when it must borrow money. Having already drained most of its cash reserves, the board was forced to tap $700 million in short-term loans to make its pension payment. The loan comes due in three months, and must be refinanced.
Fitch notes even if it passes that obstacle, the district is likely to run out of cash by the end of the current fiscal year.
Moody's Investors Service in May stripped the district of its investment grade rating.
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