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KBRA Affirms A+ Rating for Chicago O'Hare International Airport General Airport Senior Lien Revenue Bonds; Outlook is Stable

17 Aug 2023   |   New York

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KBRA affirms A+ rating with Stable Outlook for Chicago O'Hare International Airport General Airport Senior Lien Revenue Bonds.

Key Credit Considerations

The rating was affirmed because of the following key considerations:

Credit Positives

  • Strong, diverse, expansive air trade area supports O&D activity that forms the basis for hubbing.
  • ORD is a major connecting hub for United and American Airlines, and the only dual airline hub in the U.S. The stable airline base contributes to competitive pricing and favorable scheduling with ORD’s major domestic markets.
  • High airline costs are tempered by profitable airline operations. The completed OMP has reduced delays and improved airfield capacity, and KBRA expects that the TAP Program and other capital improvements will have a similar beneficial effect on terminal facilities.

Credit Challenges

  • High leverage levels for ORD’s outstanding general airport revenue bond (GARB) debt.
  • Significant future debt issuance expected throughout the current decade, which will further elevate debt metrics, while large-scale capital program entails construction risk.

Rating Sensitivities

For Upgrade

  • More consistent pattern of enplanement growth.
  • A higher proportion of total operating revenues from non-airline concession activity.

For Downgrade

  • Reduction/elimination of hubbing operations by American or United Airlines.
  • Significant deterioration in debt metrics reflecting debt issuance beyond levels currently disclosed.

To access rating and relevant documents, click here.

Methodologies

Disclosures

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.

Only those ratings on securities issued by this Issuer that also are denoted on the Security Ratings tab for this Issuer on KBRA.com as “endorsed” by Kroll Bond Rating Agency Europe Limited into the European Union and/or by Kroll Bond Rating Agency UK Limited into the UK are covered by the disclosures set forth in this press release and the corresponding Information Disclosure Form. No other ratings on issuances by this Issuer have been endorsed into the European Union or the UK, and the disclosures set forth herein and in the corresponding Information Disclosure Form are inapplicable to those ratings and may not be used for regulatory purposes by European Union or UK investors in these securities.

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 www.kbra.com.

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.

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