The city of Chicago has reportedly opted to delay an initial debt refinancing step that involves moving $800 million in variable-rate debt to fixed-rate debt, Crain's reports.
That initial debt refinancing step was previously under consideration by the city to go forward on Monday, according to Crain's sources. Now, the city is looking to move ahead with the debt refinancing phase "by mid-June."
This development comes after Moody's Investor Services dropped the city's credit rating to junk status last week.
"We had always planned to go to market sometime between now and early June," a city source told Crain's. "We are evaluating specific options to achieve the lowest borrowing costs for Chicago taxpayers in light of the action Moody's took last week."
Crain's sources didn't say whether investors are hesitant about the transaction or whether the premium is higher than anticipated.
Due to Moody's action, there are concerns that investors could call for the city's variable-rate debt to be paid back immediately, though that does not appear to be happening at the moment.