City of Chicago, IL - Wastewater Surveillance Report
Rating Summary
The long-term rating continues to reflect the City of Chicago (the City) Wastewater System’s (the System) strong financial flexibility, historically stable operating performance, relatively limited operational complexity, and the favorable demographic characteristics of the large and diverse service area. Offsetting these strengths are weaker legal protections, notably the lack of a debt service reserve (DSRF) requirement and a relatively modest 1.10x rate covenant for the second lien bonds, as well as the System’s high leverage, which is likely to be further pressured by a multi-year capital improvement program (CIP) that contemplates significant new-money borrowing over the next few years.
The Second Lien Wastewater Transmission Revenue Bonds (Second Lien Bonds) are limited obligations of the City, payable solely from a second lien on net revenues of the Sewer Revenue Fund. The City had $1.47 billion of Second Lien Bonds outstanding as of fiscal year end 2025 (FYE,…
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