KBRA Assigns A+ Rating With a Stable Outlook to Chicago O'Hare International Airport Senior Lien GARBs
20 Aug 2026 | New York
KBRA assigns a long-term rating of A+ to the City of Chicago, Illinois (the City), Chicago O'Hare International Airport (O'Hare or the Airport) Senior Lien Revenue and Revenue Refunding Bonds Series 2026B (AMT), Senior Lien Revenue Refunding Bonds Series 2026C (Non-AMT), and Senior Lien Revenue Refunding Bonds Series 2026D (Non-AMT). Concurrently KBRA affirms the long-term A+ rating on the City's approximately $11.4 billion of outstanding Senior Lien Airport Revenue Bonds (GARBs) issued for O'Hare. The Outlook is Stable.
Proceeds of the Series 2026B Bonds will be used 1) pay or reimburse the City for the cost of certain projects at O’Hare; 2) refund certain outstanding Senior Lien Bonds; 3) make the required deposit to the common debt service reserve fund; 4) fund capitalized interest on the Series 2026B Bonds; 5) pay costs of issuance; and 6) to the extent insured, pay the premium for a bond insurance policy. Proceeds of the Series 2026CD bonds will be used to 1) refunding certain outstanding Senior Lien Bonds; 2) repurchase and cancel by means of a tender offer certain other outstanding Senior Lien Bonds; 3) pay the costs of issuance; and 4) to the extent insured, pay the premium for a bond insurance policy.
The City's GARBs are secured by a first lien pledge of Net Revenues derived from the operations of O’Hare and certain funds and accounts maintained under the Senior Lien Indenture. The Series 2026D Bonds are further secured by a subordinate pledge of passenger facility charge (PFC) revenues. O’Hare is owned by the City and operated by the Chicago Department of Aviation (CDA). The City accounts for O’Hare as an enterprise fund separate and distinct from Chicago Midway International Airport (Midway), which the City also owns and operates through the CDA. Thus, bonds issued for O’Hare have no claim on the revenues generated at Midway, and vice versa.
Key Credit Considerations
The rating was assigned because of the following key credit considerations:
Credit Positives
- Strong, diverse, expansive air trade area supporting origination and destination (O&D) activity and the nation’s largest dual-hub.
- Adequate debt service coverage and sound liquidity, underpinned by a residually based airline use and lease agreement (AULA).
- The expected efficiency, capacity and competitive benefits gained with the completion of the ORDNext capital improvement program.
Credit Challenges
- With approximately 55% of ORDNext yet to be funded, the City remains exposed to various financing and execution risks for the remainder of the program.
- Exceptionally high ($20.1 billion, FY 2032) pro-forma leverage, reflective of the City's extensive investments in O'Hare, resulting in very high projected airline costs.
Rating Sensitivities
For Upgrade
- Sustained growth in passenger activity and related revenues leading to materially lower airline costs.
- Moderating leverage metrics through amortization of existing debt load and/or limited future issuance
For Downgrade
- Issuance of GARBs beyond what is currently contemplated, leading to diminished financial flexibility.
- While unlikely, a sustained loss in passenger volume and revenues due to a significant retrenchment of one or both of the Airport’s leading carriers.
To access ratings and relevant documents, click here.