CHICAGO (AP) — Chicago’s credit rating has been downgraded to one step above junk grade by Fitch Ratings after the Illinois Supreme Court struck down Mayor Rahm Emanuel’s reform plan for two city pensions.

Fitch lowered Chicago’s rating from BBB+ to BBB- on Monday, increasing the cost of borrowing.

Fitch said it believes Thursday’s ruling “was among the worst of the possible outcomes for the city’s credit quality” and made clear the city’s “responsibility to fund the promised pension benefits.”

It said the rating could stabilize at BBB- if the city presents “a realistic plan that puts the pension funds on an affordable path toward solvency.”

Emanuel spokeswoman Carole Brown noted Fitch points out the city’s improved finances, adding its ability to meet its current commitment to the pension funds “has not changed.”