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CHICAGO (AP) — A major bond rating agency's downgrade of Chicago Public Schools' debt could cost the district more than $220 million in penalties.
Fitch Ratings dropped the Chicago Board of Education's bond rating by three levels Friday, placing it just above junk status.
The downgrade could trigger millions in penalties because an agreement between CPS and financial institutions requires the district to maintain a certain credit rating. CPS officials say they're negotiating with the banks to avoid the penalties.
The downgrade was more bad news for a district facing deep financial problems.
In a statement, schools CEO Barbara Byrd-Bennett said the budget issues are primarily driven by "a broken pension system" expected to cost the district almost $700 million next year. She renewed Mayor Rahm Emanuel's call for changes to teacher pensions.
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