With one of its two hub airlines in bankruptcy, Chicago officials breathed a bit easier last month when Moody’s Investors Service affirmed its ratings on Chicago O’Hare International Airport’s $5.6 billion of general airport revenue debt. 

Fitch Ratings last month revised its outlook to negative on O’Hare’s debt, along with two other American Airlines hub airports, after the carrier’s November bankruptcy filing.

Moody’s last month affirmed its A1 rating and negative outlook on O’Hare’s third-lien general airport revenue bonds  — the primary borrowing vehicle used by the city to fund O’Hare’s expansion program.

Moody’s also affirmed its A1 and stable outlook on the second-lien bonds, its Aa3 rating and stable outlook on the first-lien bonds, and the A2 rating and stable outlook on $816 million of passenger facility charge revenue bonds.

The credit benefits from a large and diverse origin and destination base with strong demand, its unique dual-hub status for both American and United Airlines, and management’s completion of the $3.28 billion first phase of an $8 billion expansion program within budget.

The third lien’s rating is being stressed by weaker-than-expected passenger levels and the increased debt load needed to finance the expansion program along with construction risks.

“The negative outlook, which was applied in January 2011, is reinforced by the Chapter 11 bankruptcy filing of American Airlines’ parent company AMR Corp.,” Moody’s analysts wrote.

American and its affiliate American Eagle accounted for 36% of O’Hare traffic in 2010.

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