Chicago is returning to market with a $375 million deal for O'Hare International Airport, according to rating agency reports, and plans a $9.1 billion ramp-up in bond issuance that includes significant new money debt to fund the airport's capital program.
The proceeds of the Series 2025A and 2025B senior lien general airport revenue bonds will restore borrowing capacity on a line of credit used to fund airport capital projects, the reports said.
The GARBs are secured by a first lien pledge of net revenues derived from O'Hare operations, and certain funds and accounts maintained under the senior lien indenture.
Fitch Ratings affirmed its A-plus rating on O'Hare's GARBs Sept. 11, citing Chicago's strategic location as a hub and O'Hare's
KBRA rates the bonds A-plus with a stable outlook. In a Sept. 12 rating report, the rating agency also affirmed the A-plus rating and stable outlook on O'Hare's outstanding general airport senior lien revenue bonds.
S&P Global Ratings rates the bonds A-plus with a stable outlook. It affirmed its A-plus long-term rating and underlying rating on Chicago's GARBs in a Sept. 11 rating report.
"The stable outlook on the GARB rating reflects our expectation that ORD enplanements will further recover and the airport will return to fully residual operations, supporting financial metrics that are consistent with the rating as the city issues additional debt to fund portions of the capital program," S&P said in its rating report.
The airport had $10.8 billion of total debt outstanding at fiscal year-end 2024. According to KBRA, total pro-forma debt will hit a peak of $19.8 billion by calendar year 2031.
The Chicago Department of Aviation is in the midst of a $13.4 billion capital improvement program at O'Hare which includes the $11.9 billion ORDNext terminal area program and $1.5 billion of additional CIP projects.
Chicago plans to issue more GARBs later this year to refinance outstanding debt and fund parts of the airport's capital improvement program.
"KBRA's analysis considers this planned borrowing, which includes $9.1 billion of additional, new money debt," the rating agency said. "With just 25.7% of the Airport's CIP funded at FYE 2024, the Airport's debt burden is expected to increase significantly through FY 2031."
Fitch noted that while O'Hare's debt burden will rise substantially, "net leverage will likely remain below 13x during the construction period and average 11x over 2025-2035, excluding the benefit of capitalized interest." But it said the preapprovals from airlines for the capital program and the long-term residual airline agreement somewhat offset those credit pressures.
O'Hare "has demonstrated success on project delivery of complex projects while maintaining costs within budget," the rating agency said.
The city's finance team did not respond to a request for comment by press time.
