Standard & Poor's Ratings Services dropped the Chicago Public Schools' (CPS) credit rating to junk status on Friday.
In lowering the school district's rating from "BBB" to "BB" with a negative outlook, S&P pointed to the school district's 2016 budget plan, which relies on $480 million in pension savings from Springfield as well as $200 million in borrowing.
"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," Standard & Poor's credit analyst Jennifer Boyd said in a statement.
CPS, which is grappling with a $1.1 bilion budget deficit, has already had its credit rating downgraded to junk status by Fitch Ratings and Moody's Investor Service.
In response to the latest downgrade by S&P, CPS Chief Financial Officer Ginger Ostro said, "There is no question that Chicago Public Schools faces enormous financial challenges, and this report from S&P confirms the urgency of reaching a comprehensive budget solution with our partners in Springfield to prioritize education funding and finally end pension inequity."