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CPS' financial straits cost taxpayers with sharply higher interest rates on bond sale

April 22, 2015

The Chicago Public Schools - already facing a federal criminal investigation of its CEO and a projected $1.1 billion budget deficit next school year - now must pay a price for those problems through higher interest rates on a new $300 million bond deal. That came after Fitch Ratings, a Wall Street bond-rating agency, downgraded the Chicago Board of Education's credit rating last month three notches, leaving it just one notch above junk status, and after school officials last week disclosed there is an ongoing federal investigation involving CPS chief executive officer Barbara Byrd-Bennett. Brian Battle, director of trading for Performance Trust Capital Partners, a Chicago firm that analyzes bonds for investors, said the district's poor credit rating meant the interest rate on the deal was much higher than it would have been for a government selling bonds with a higher rating.

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