OREANDA-NEWS. S&P Global Ratings revised its outlook to stable from negative on Chicago, Ill.'s outstanding general obligation (GO) debt and GO limited tax certificates. At the same time, S&P Global Ratings affirmed its 'BBB+' rating on Chicago's outstanding GO debt and its 'BBB' rating on the city's series 1997 GO limited tax building acquisition certificates. Chicago's GO bonds are secured by a pledge of the city's full faith credit and resources, as well as ad valorem property taxes without limitation as to rate or amount. The certificates are payable from legally available funds, and are not secured by a debt service levy.

"The outlook revision reflects our view of the Chicago city council's recent approval of a new water/sewer tax, which supports larger contributions into its poorly funded municipal employees' pension plan," said S&P Global Ratings credit analyst Helen Samuelson. "We view this as a positive step to address the city's underfunded pensions," Ms. Samuelson added.

The revenues generated by the new tax on water-sewer bills, together with increased contributions from new hires, and supplemented by corporate fund and other enterprise fund contributions, will be transferred to the general fund to cover the planned increased contributions to the city's municipal pension plan over the next five years.

We consider Chicago's economy strong. The city, with an estimated population of 2.7 million, is located in Cook County in the Chicago-Naperville-Elgin, IL-IN-WI MSA, which we consider to be broad and diverse.