Chicago Public Schools borrow $275 million at sky-high interest rate
Posted on 06/20/2017 7:22:43 AM PDT by 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
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An additional $112 million that’s needed to fund district operations will be borrowed separately.
(Excerpt) Read more at chicago.suntimes.com ...
Yup,I understand how it works.The point I was making....which I'm sure you caught...is that Massachusetts pols,just about the filthiest Rats in the country,knew when these agreements were reached that that would be what happened but didn't care.
After all,those thousands and thousands of union pigs vote 100% Rat and their unions give generously to Rats.
Of course Massachusetts isn't the only place where greedy Marxist unions and filthy,power hungry Rats have formed an alliance.Chicago seems to be on the brink of bankruptcy thanks to such an alliance.
Oops. I made an error in my #33 post to you. I forgot the word average. The sample retirement formula should read:
0.02 x years of service x average of three highest years’ salary
My sister taught out here in California she gets 80 percent of her last salary she and her co horts moved her up to some silly postion that bumped her pay before she retired I use to talk to her about her saving money for retirement she just laughed and said i got a pension
Yeah, next they’ll get title loans on all the city cars.
How are they going to pay back the loan?
...
Capital One has no interest for 12 months on all balance transfers.
“How are they going to pay back the loan?”
All those children have two kidneys. Half of them have two testicles. they only need one of each. All of them have a disposable liver lobe they don’t need. The important thing, the most important thing, is to keep the teacher’s salaries and benefits at their present level, plus some room for growth.
As long as the teacher’s union gets paid, that’s all that counts.
They can default on the bank loan, but not on the pension payments.
There’s a site that lists all the CA retirees pensions, lots in the over 100K club.
Would YOU lend to ANY Chicago entity?
REALLY??
Not surprised.Spending time on that site must be fun.Some time ago I stumbled upon a similar site for Massachusetts.I can't find it now...assuming it still exists.
My favorite Massachusetts pension story involves a guy named William "Billy" Bulger.He's a Rat who was once very powerful in thestate legislature.He's also the brother of one James "Whitey" Bulger...formerly the FBI's Most Wanted criminal...serial killer,drug dealer,subject of a very good film called "Black Mass".
Billy was once called to testify before a House Committee (US House).He took the 5th several dozen times.
He gets a Massachusetts pension of about $250K/yr.
Who the hell are the idiots that lend to Chicago ?
Putting the Bluesmobile police car back together is going to need some lead time.
You sir(or madam) insult goat copulation (at least goat copulation makes baby goats)! Unless you are implying that Illinois state legislators are copulating with goats which might actually be the case however I think they are mostly pre-convicted pedophiles.
Their day is coming soon!
“So that part of the constitution will simply have to be changed. Some retired folks have an annual school pension of $20,000. Leave them alone. But other people are pulling in large, obscenely large, amounts. They’ve got to take a haircut.”
Unfortunately, that’s not what happened in Detroit. And don’t forget, some of these people don’t participate in Social Security. As usual the little people will certainly get screwed.
Interesting.
“My sister taught out here in California she gets 80 percent of her last salary she and her co horts moved her up to some silly postion that bumped her pay before she retired”
This is a very common tactic, the last few years of government employment are mostly ceremonial and involve surfing the Internet, “fact finding” trips and conferences.
In Illinois they have a best 3 out of the last 5 years formula - so my friends would become the Assistant Freshmen Golf Coach, or Director of the Drama club. This would boost their best 3 and increase their pension. It is a game most taxpayers are unaware of.
>>J.P. Morgan is imprudent to loan this money...<
I doubt it. It would be interesting to learn the terms of the loan. It’s almost certainly a loan secured by something, whether school property or, more likely, a prior claim on some sort of revenue such as yet-to-be-collected property taxes.
But if you’re an individual who invests in municipal bonds, don’t let the fact that J.P. Morgan bought some influence your decision. Anything you buy now is very likely to end up in the toilet. Illinois is over the edge, the canary in the coal mine for the rest of the blue states. The big question is whether the U.S. government is a blue state. It just might be.
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