Chicago Schools Drama Has Credit Assessors on Alert for Risks.

Moody's Ratings is closely monitoring the recent change in leadership at the Chicago Board of Education, as the school district faces mounting financial challenges. While the management changes themselves do not significantly impact credit quality, Moody's analysts are concerned that the new board may implement policies that could affect the district's financial operations. The district is already projecting deficits for the next five years, and additional costs such as pay raises for the Chicago Teachers Union could exacerbate the situation. The city government's demand for the school district to pay $175 million in non-teacher pension costs this year has also created friction, with the mayor suggesting a short-term loan to cover these expenses. Moody's views an increase in cash-flow borrowing as credit negative, and the district's CEO has refused to take the loan and rejected the mayor's request for his resignation. [Extracted from the article]