CHICAGO — Fitch Ratings revised its outlook on Chicago’s general obligation credit to negative, delivering what was the second dose of bad news for the city on Friday following the International Olympic Committee’s rejection of its bid to host the 2016 Summer Games.

Fitch revised the outlook to negative from stable on the AA assigned to both the city’s outstanding GO debt and its sales tax-backed revenue bonds ahead of tomorrow’s sale of $90 million of sales-tax refunding bonds. Fitch also downgraded the city’s motor fuel bonds two notches to A-minus from A-plus.

“Revision of the outlook to negative is based on the large structural imbalance in the city’s operating funds … and a weakened local economy, with a challenged housing market and heightened unemployment,” Fitch analysts wrote.

The city is working to close a $520 million deficit in its 2010 preliminary budget ahead of the release later this month of a formal $6.2 billion spending plan for next year.

Fitch warned that any move to tap $900 million in permanent reserves established with some proceeds from its leases of the Chicago Skyway toll bridge and parking meter system “could trigger negative rating action” as could “further deterioration in the local economy.”

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