Lofty bond yields show Chicago school struggles

Another indicator points to financial trouble in Chicago.

The Chicago Board of Education sold $675 million in bonds on Wednesday, with yields hitting 8.5 percent, according to Reuters. That yield is only about 1 percent lower than the yield on 10-year bonds (Exchange: GR10Y-GR) issued by cash-strapped Greece and roughly equal to the yields on Greek 30-year debt.

The Chicago general obligation bonds, which are due in 2044, are not directly comparable to the Greek bonds. But the yields show just how much concerns about the financial state of Chicago have grown.

Chicago has struggled to fully pay public pensions and fund its public education system. The bonds sold by the Board of Education on Wednesday carry a "junk" rating.

Legislation that would allow Chicago's public schools to declare bankruptcy was introduced last month, and the board of education has attempted to assure investors that it could pay off debt if the school district ends up in bankruptcy court.

The school district previously planned to sell $875 million in bonds Wednesday but trimmed the offering.

— Reuters contributed to this report.

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