Chicago Public Schools borrow $275 million at sky-high interest rate

Sun-Times ^ | 06/19/2017 | Lauren FitzPatrick and Fran Spielman

[george76]

The Chicago Public Schools will pay 6.39 percent — an extraordinary interest rate by short-term lending standards — to borrow $275 million it needs to make a mandatory payment for retiree pensions before a June 30 deadline.

That’s more than four times the interest rate a typical government would pay on the same borrowing deal

...

It’s yet another sign of the dire financial condition of the nation’s third-largest public school system, which for months has had a “junk” credit rating from Wall Street financial institutions.

CPS officials secured the $275 million on Monday from J.P. Morgan. It’s the final chunk of cash needed to make the $721 million payment for teacher pensions that’s due at the end of the month

...

An additional $112 million that’s needed to fund district operations will be borrowed separately.

[Chode]

if they don't pay, JPM should change the locks on the schools and sell them

[redgolum]

It is in the state constitution.

Nutty I know, but they are in a death pact. My bride teaches in IL (we live in IA), and we have never planed on her pension being paid. Of course, we don’t really plan on our IRA or 401K being allowed to stay either.

[Texas Eagle]

The Chicago Public Schools will pay 6.39 percent — an extraordinary interest rate by short-term lending standards — to borrow $275 million it needs to make a mandatory payment for retiree pensions before a June 30 deadline.

Uhhhhhh. A question from the back of the FEMA Re-education camp?

What happens when the next mandatory payment comes due?

I'll take my answer over the loudspeakers.

[stevem]

I guess Morgan has officially lost its mind, loan officer and director wise.