Standard & Poor's Ratings Services lowered its long-term rating and underlying rating (SPUR) on Chicago Board of Education's general obligation (GO) bonds to 'BB' from 'BBB' and removed the ratings from CreditWatch, where they had been placed with negative implications on July 2, 2015 while we monitored the board's decisions in constructing its fiscal 2016 budget. The outlook is negative.
"The rating action reflects our view of the proposed fiscal 2016 budget, which includes what we view as the board's continued structural imbalance and low liquidity with a reliance on external borrowing for cash flow needs," said Standard & Poor's credit analyst Jennifer Boyd.
The negative outlook reflects our anticipation that low liquidity and a structural imbalance are likely to continue to challenge the board during the one-year outlook horizon, which could lead us to lower the rating during that timeframe.
