Moody’s Affirms Midway

Moody’s Investors Service has affirmed its A2 first-lien and A3 second-lien ratings assigned to Midway Airport’s $1.4 billion of outstanding bonds in conjunction with Chicago’s replacement of a swap agreement on a portion of Midway’s debt portfolio.

Chicago is replacing Morgan Guaranty Trust Co. as counterparty for a swap on some 2004 bonds with Wells Fargo Bank. Under the terms of the existing swap, the airport pays a fixed rate of 4.174% and receives a variable rate based on the Securities Industry and Financial Markets Association index plus 0.05%. Under the new swap, Midway will receive the same floating rate but the fixed rate will be increased to about 4.314%.

As of March 31, the market value of the swap was $6.1 million in favor of the counterparty. The new agreement does not include any collateral posting requirements. Under the former one, the city was required to post collateral under some circumstances following the removal of insurance from Ambac Assurance Co.

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Transportation industry
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