Moody’s downgrades Cook County debt over pensions

Moody’s Investors Service has downgraded Cook County’s credit rating, citing an ongoing county and state pension crisis.

The agency announced Friday it’s lowering the rating on $3.7 billion in debt from Aa3 to A1.

The new rating is still well within the range of investment grade. But the county’s outlook remained negative — an indication another downgrade could occur if there’s no pension fix.

Moody’s said the outlook “reflects the formidable hurdles facing the county” as it attempts meaningful pension reform. The agency noted the General Assembly’s “legislative paralysis” could delay the county’s reforms, and that any action will likely prompt a legal challenge.

Moody’s says the county reported an unfunded liability of $5.6 billion. But the agency’s more conservative estimate puts the shortfall at $12.7 billion.