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Chicago pulls off $674 million refinancing, but at a heavy price tied to junk status

May 27, 2015

Cash-strapped Chicago eased its immediate financial crisis Wednesday by converting $674 million of variable rate debt to fixed interest rates, but paid a heavy price tied to its junk bond rating. Market analyst Brian Battle agreed that Chicago had no choice but to refinance. He argued that investors appeared to be driven largely by the discount that the bonds were sold at, meaning the long-term costs to the city could be considerable.

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