Press Release|Public Finance

KBRA Affirms AA Rating with Stable Outlook for City of Chicago Second Lien Water Revenue Bonds

11 Apr 2024   |   New York


KBRA affirms the long-term rating of AA with a Stable Outlook for the City of Chicago Second Lien Water Revenue Bonds.

Key Credit Considerations

The rating was affirmed because of the following key credit considerations:

Credit Positives

  • Large, diverse, and stable metropolitan Chicago customer base; high quality and reliable water source with substantial excess capacity.
  • Timely enactment of operational efficiencies by management that have resulted in a right-sizing of staffing levels and slowing of expense growth.
  • Excellent liquidity position.

Credit Challenges

  • Recent weakening in operating performance and debt service coverage attributable to rising operating costs.
  • Capital intensive operation necessitating on-going investment and debt issuance, though the recent introduction of pay-as-you-go financing is a moderating factor.
  • Narrow coverage and minimal anti-leveraging security protection under bond documents.

Rating Sensitivities

For Upgrade

  • Favorable progress in addressing infrastructure needs of the System, funded with a prudent mix of debt and non-debt sources.
  • Moderate declines in outstanding leverage through limiting future debt issuance and more rapidly amortizing outstanding debt.

For Downgrade

  • Unanticipated capital expenses significantly beyond what is projected in CIP.
  • Significant change in KBRA’s view of overall bill affordability, driven by material increases to existing fees and taxes, including the Utility Tax, and/or the imposition of new fees or taxes.

To access rating and relevant documents, click here.



A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

Doc ID: 1003904

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