Yvette Shields

CHICAGO — Moody’s Investors Service late last week downgraded two of five Wisconsin school districts, citing fiscal pressures posed by risky investments in collateralized debt obligations with a credit default swap to fund their other post-employment benefit liabilities.

CHICAGO — A merger between United Airlines and US Airways would hit the smaller hub airports where the two operate hardest as the carriers would likely move to consolidate those bases, Moody’s Investors Service warned in a new report on the potential credit impact of a union between the two.

Chicago Mayor Richard Daley is seeking City Council approval to sell up to $175 million of general obligation bonds in June to provide funding for the Chicago Public Schools for construction projects.

CHICAGO — Illinois Gov. Pat Quinn yesterday signed legislation that cuts retirement benefits for future employees to help rein in the state’s growing unfunded pension liabilities, a measure he hopes lays the groundwork for legislative approval of a controversial income tax increase.

CHICAGO — The Art Institute of Chicago received final approval from the Illinois Finance Authority board yesterday for a debt refunding this spring of up to $245 million that will allow the prestigious museum to shed its floating-rate risks.

Moody’s Investors Service upgraded to Baa1 from Baa2 its rating on $6.1 million of Menahga Independent School District 821’s general obligation debt due to its stable financial performance.

Standard & Poor’s last week dropped the underlying rating on pieces of Midwest Family Housing LLC’s Series 2006A bonds and assigned a negative outlook due to poor debt-service coverage ratios and suspension of work on the project.

More than 20 school superintendents from across Illinois met in Chicago last week to discuss aid cuts, and called on state leaders to avert $1.3 billion in funding reductions proposed in the fiscal 2011 budget.

CHICAGO — While the market’s attention is focused on Chicago’s sale of more than $1 billion of new-money and refunding debt for O’Hare International Airport this week, the city is also preparing to refund and reoffer pieces of its Midway Airport debt it had hoped to retire with its now-stalled plan to privatize the facility.

After debuting its new 16,000-square-foot trading floor earlier this month, Chicago-based BMO Capital Markets is now looking to fill some of its empty seats with taxable traders and hire additional bankers to generate more product for its desk as the firm seeks to crack the top-10 list of senior managers of municipal offerings.

Illinois faces increasing pressure on liquidity as a short-term borrowing is coming due, putting the state on pace to close out the fiscal year on June 30 with a $5.5 billion backlog of bills, Comptroller Daniel Hynes warned in a recent report.

CHICAGO — More than three years after opening a Chicago office, Public Financial Management Inc. has hired longtime Jefferies & Co. public finance banker Jill Jaworski as its first financial adviser based in Chicago. The firm expects to announce hiring at least two additional advisers later this spring.

CHICAGO — The financial outlooks for the St. Louis Metro and Menasha, Wis., brightened this week after voters approved a sales tax increase for the struggling transit agency and a sale-leaseback transaction for the city that will help it settle $23 million of defaulted debt.

CHICAGO — Federal officials yesterday announced $410 million in new funding to help support Chicago’s $8 billion runway expansion project at O’Hare International Airport, an award that comes one week ahead of the city’s sale of more than $1.1 billion of new-money and refunding O’Hare debt.

Standard & Poor’s downgraded Jackson County’s 2006 special obligation bonds issued for the Harry S. Truman Sports Complex project by one notch to A-plus due to a weakened financial position that follows several consecutive years of general fund shortfalls.

Moody’s Investors Service last week upgraded St. Peter Independent School District 508’s general obligation rating one notch to Baa1, affecting $1.6 million of debt. Analysts said they expect the district’s financial position will remain stable given management’s conservative budgeting practices and reserve policy.

Moody’s Investors Service stripped Proctor Hospital of its investment grade rating recently, lowering the credit to Ba1 from Baa3 and warning of further action by assigning a negative outlook due to a decline in operating performance since fiscal 2007.

The state put 95 schools on its watch and early warning list following an annual review of districts’ financial status in the Illinois Board of Education’s 2010 school district financial profile report.

CHICAGO — The St. Louis Metro transit agency and Menasha, Wis., will face voters tomorrow with ballot measures aimed at aiding their fiscal health.

CHICAGO — The Iowa Legislature adjourned this week after passing a $5.28 billion budget that relied on cuts, reserves, and savings from a reorganization plan to offset shrinking revenue, and included a $45 million increase in the state’s bond-financed Iowa Jobs capital program.