The first of Wall Street’s major bond-rating companies is out with its take on the new Chicago Public Schools teachers contract, and it’s not pleased.

In a statement issued this afternoon, S&P Global said that while it’s not changing its current rating of BB-, which is three levels below investment grade, the $1.5 billion settlement “compounds long-term (financial) pressures” on CPS and appears to lock the district into a less than desirable situation.

“The settlement has increased expenditures beyond anticipated revenue growth and without corrective measures, and could potentially slow or reverse the (Board of Education’s) recent financial progress,” the firm said.

“We expect the Board of Education’s recently secured increasing revenue streams now will go to higher operational spending rather than to improve its liquidity and fund balance, which will likely delay upward rating movement,” S&P said. “The ability of the district to improve its financial standing in fiscal years 2021-24 is uncertain.”

I reported yesterday that CPS expects to pay for the contract with a combination of higher property taxes and increased aid from the state. S&P picked up on the latter, saying promised hikes in state aid are “critical” for CPS and any reduction, while not expected, would create “immense” financial pressure.

Update—CPS now is commenting. In a statement, it notes that a much smaller ratings service, Kroll, was less critical, and repeats its prior statements that expected income from property-tax hikes and state aid should be sufficient to handle contract-related bills.