Chicago earned an upgrade from Fitch Ratings Thursday thanks to the city’s improving economy and diminishing long-term debt burden, Bloomberg News reported. Fitch boosted the rating of the third-largest US city one notch to BBB+, up from BBB, and now three notches above junk, with a stable outlook. It’s the second upgrade for Chicago from the rating company in the last 12 months as the financial picture for the city improves. Less than a year ago, the city also shed its lone junk rating from Moody’s Investors Service. Chicago’s finances have long been strained by a growing unfunded pension liability that’s reached about $35 billion, and more recently by the cost to care for thousands of new migrants arriving from border states. But, it’s fiscal trajectory has been improving following an infusion of federal pandemic aid, an economic rebound and efforts to better fund its retirement plans. The upgrade was “driven by a decline in the city’s long-term liability burden stemming from steady growth in the economic resource base and improved debt management practices,” Fitch wrote in the report.
