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Illinois pension crisis eludes easy solutions

Lawmakers in Illinois say they may try to fix the state’s ailing pension system by asking current workers to pay more into the plan, though the approach faces substantial legal and political obstacles.

The lawmakers are also entertaining the politically difficult idea of applying broader pension changes made this year for newly hired employees to current workers. Those include raising the retirement age and scaling back on annual cost-of-living raises.

Whatever approach is embraced, it remains unclear whether such strategies would fix the Illinois system, which is 45 percent funded. That makes it the most under-funded state plan in the U.S., according to Moody’s Investor’s Service. Get the full story »

Moody’s gives Playboy corporate debt a B2 rating

The corporate debt rating for Playboy Enterprises Inc. was set Friday at “B2″, a speculative or junk rating, by Moody’s Investors Service.

The same rating was placed on $195 million worth of senior secured credit facilities. A “B3″ probability of default rating was issued.

The ratings were established in connection with the buyout of the Chicago company by a partnership headed by founder Hugh Hefner. Get the full story »

Moody’s puts Illinois in top 5 in debt, pension needs

Illinois’ fiscal woes have translated into another dubious distinction for the state: A newly released analysis by Moody’s Investors Service ranks Illinois among the five states with the highest debt and pension funding needs.

Connecticut has the greatest funding needs, followed by Hawaii, Massachusetts, Mississippi and Illinois, Moody’s found.

Moody’s looked at each state’s combined pension and long-term debt as a percentage of personal income, gross domestic product and state revenue, and calculated its debt per capita. Illinois’ combined pension and debt burden translates to $6,692 per person, fifth highest in the country. Get the full story »

SEC launches inquiry into Illinois pensions

By Monique Garcia and Kathy Bergen | The Securities and Exchange Commission is conducting an inquiry into the state’s financial disclosures about potential savings expected from the pension reforms enacted last spring, Gov. Patrick Quinn’s office confirmed Tuesday morning.

“This is not an investigation, this is an inquiry,” said Kelly Kraft, the governor’s budget spokeswoman. “The SEC has stated this is not an indication of any violation. We feel our disclosures have always been accurate and complete.” Get the full story »

S&P, Moody’s: U.S. top credit rating in jeopardy

Two leading credit rating agencies on Thursday warned the U.S. on its credit rating, expressing concern over a deteriorating fiscal situation that needs correcting.

Moody’s Investors Service Inc. said in a report Thursday that the U.S. will need to reverse an upward trajectory in the debt ratios to support its Aaa rating.

“Further actions will be necessary to avoid an unfavorable debt trajectory, which would increase the probability of a change to a negative outlook on the Aaa rating,” Moody’s said in a report. Get the full story »

Moody’s downgrades outlook for O’Hare revenue bonds

By Jon Hilkevitch | A major credit rating firm delivered a stern warning Monday regarding the mounting risks that Chicago is taking by going deeper into debt in an attempt to build more runways at O’Hare International Airport without securing financial support from the airlines.

Moody’s Investors Service downgraded to a “negative” outlook from “stable” some of the revenue bonds that the Chicago Department of Aviation has issued to help pay for the $15 billion O’Hare Modernization Program and related projects.

Moody’s cited concern about the city’s latest gambit to postpone repayment of all interest on some construction bonds until at least 2018, resulting in much larger payments over the long run. The airlines and their customers would eventually be stuck paying for the increased borrowing costs through higher landing fees and higher airfares. Get the full story »

Moody’s eyes negative outlook for U.S. Aaa rating

Moody’s warned Monday that it could move a step closer to cutting the U.S. Aaa rating if President Obama’s tax and unemployment benefit package becomes law.

The plan agreed to by President Obama and Republican leaders last week could push up debt levels, increasing the likelihood of a negative outlook on the United States rating in the coming two years, the ratings agency said. Get the full story »

Moody’s doubts full adoption of debt reduction plan

Deficit-reduction measures presented by the leaders of a Congressional commission would support the country’s Aaa rating but implementation of the full plan looks unlikely, Moody’s said on Monday. Get the full story »

Small business loans less risky than junk bonds?

In the world of high-yield securities, small business loans are safer than junk bonds, and are expected to get even less risky over the next two years, according to PayNet, which provides risk-management tools to the commercial lending industry. Get the full story »

Moody’s raises its ratings on UAL Corp.

Moody’s Investors Service raised its ratings on UAL Corp. a notch, finishing the review of the airline it begun when the parent of United unveiled its deal to merge with Continental Airlines Inc. Get the full story »

Moody’s lowers outlook on Illinois to negative

Moody’s Investors Service revised the outlook on Illinois’ A1 general obligation debt rating to negative from stable, citing intensified financial stress facing the state.

“The state reported a very large negative fund balance for fiscal 2009 and has faced fragile economic conditions and continuing uncertainty over its ability to meet pension funding obligations,” Moody’s said in a statement. Get the full story »

Moody’s may raise McDonald’s ratings

(Reuters/Molly Riley/Files)

Moody’s Investors Service said on Friday it may raise its ratings on McDonald’s Corp. due to solid operating performance and growth prospects.

Moody’s placed McDonald’s A3 senior unsecured rating, the seventh-highest rating, and Prime-2 short-term commercial paper rating on review for possible upgrade.

“The review for possible upgrade reflects McDonald’s solid operating performance achieved through various strategic initiatives such as new product innovation, cost savings, re-imaging and new restaurant growth,” Moody’s analyst Bill Fahy said in a statement. Get the full story »

Moody’s lifts Walgreens on deal with CVS

Moody’s Investors Service lifted its ratings outlook on Walgreen Co. (WAG) to stable from negative after the drugstore chain resolved a spat with CVS Caremark Corp. (CVS).

Walgreens agreed to new terms last week under which it will continue to participate in the smaller rival’s pharmacy benefit network. Chief Executive Greg Wasson said then he was “pleased” with the outcome. Walgreen had said earlier this month it planned to pull its stores from the network. Two days later, CVS Caremark said it planned to drop Walgreen by July 9. Get the full story »

Moody’s downgrades USG ratings

Moody’s Investors Services lowered two credit ratings for building materials company USG Corp. Thursday, citing a dim outlook for the building sector.

Moody’s lowered its corporate family and probability of default ratings for USG to “Caa1″ from “B3.” It also downgraded guaranteed senior unsecured notes due 2014 to “B2″ from “B1″ and other senior unsecured debt to “Caa2″ from “Caa1.” Get the full story »

Moody’s cuts BP rating for 2nd time in a month

Moody’s Investors Service downgraded the senior unsecured ratings of BP PLC on Friday, the latest in a string of hits to the beleaguered oil company.