KBRA Assigns A+, Stable Outlook to Chicago O'Hare International Airport GARBs
11 Sep 2025 | New York
KBRA assigns an A+ long-term rating, with a Stable Outlook to Chicago O'Hare International Airport (O'Hare) General Airport Senior Lien Revenue Bonds (GARBs), Series 2025A (AMT) and Series 2025B (Non-AMT) issued by the City of Chicago (the City). Concurrently KBRA affirms the long-term A+ rating, with a Stable Outlook on the City's approximately $10.8 billion of currently outstanding O'Hare GARBs.
Proceeds of the Series 2025A and Series 2025B Bonds (the Bonds) will be used by the City to replenish borrowing capacity under a line of credit used to fund certain Airport capital projects on an interim basis, fund the required deposit to the common debt reserve fund and capitalized interest, and pay related costs of issuance. The City expects to issue additional General Airport Senior Lien Revenue Bonds (GARBs) later this year to refinance outstanding debt and/or fund elements of the ORDNext capital program. KBRA’s analysis considers this planned borrowing, which includes approximately $1.6 billion of additional, new money debt. Total, pro-forma debt is expected to reach a substantial peak of $19.8 billion by CY 2031.
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. O’Hare is owned by the City and operated by the Chicago Department of Aviation (the 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.
Key Credit Considerations
The rating actions reflect 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 DSC and sound liquidity, underpinned by a residually based airport use and lease agreement.
- The expected efficiency, capacity and competitive benefits of successfully completing ORDNext.
Credit Challenges
- Relatively low (27%) level of ORDNext program financing currently secured, exposing the City to various financing and execution risks.
- Exceptionally high ($19.8 billion, CY 2031) pro-forma leverage, largely driven by ORDNext, and projected, very high airline costs.
KBRA’s Stable Outlook reflects KBRA’s expectation that the broad and diverse service area will sustain demand for air service, allowing both United and American to maintain and grow their connecting hub operations as the Airport’s expanded facilities come online. Furthermore, KBRA believes the airlines’ ability to capitalize on additional revenue opportunities will accommodate the growth in operating costs associated with the Airport’s increased debt burden, with consistent debt service coverage resulting from the residual rate setting methodology.
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 as a result of an airline de-hubbing
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