KBRA Assigns A+ Rating to City of Chicago O’Hare International Airport Series 2026A Bonds; Outlook Stable
Rating Action Overview
KBRA assigns an A+ long-term rating to the City of Chicago’s Chicago O’Hare International Airport General Airport Senior Lien Revenue Bonds (GARBs), Series 2026A (Non-AMT). Concurrently, KBRA affirms the A+ rating on approximately $10.8 billion of outstanding Chicago O’Hare International Airport General Airport Senior Lien Revenue Bonds. The Outlook is Stable.
Security and Legal Structure
The O’Hare GARBs are secured by a first lien pledge of Net Revenues generated from the operations of O’Hare, along with certain funds and accounts maintained under the Senior Lien Indenture. O’Hare is owned by the City of Chicago and operated by the Chicago Department of Aviation (CDA). The City accounts for O’Hare as a separate enterprise fund, distinct from Chicago Midway International Airport, which is also owned and operated by the City through the CDA.
Capital Improvement Program and ORDNext Expansion
The CDA is executing a $13.4 billion capital improvement program (CIP), stated in escalated dollars through completion. The plan includes the $11.9 billion ORDNext terminal area program (TAP) and an additional $1.5 billion in other CIP projects. ORDNext encompasses construction of two satellite concourses west of the existing Concourse C and replacement of Terminal 2 with the new O’Hare Global Terminal (OGT). Construction of the first satellite concourse, known as Concourse D, commenced in July 2025 and is scheduled for completion in 2028.
Key Credit Considerations
Credit Positives
O’Hare benefits from a strong, diverse, and expansive air trade area that supports robust origin-and-destination demand and maintains the nation’s largest dual-hub airport system.
Debt service coverage levels are adequate and liquidity remains sound, supported by a residual airline use and lease agreement structure.
Successful completion of the ORDNext program is expected to enhance operational efficiency, increase capacity, and strengthen the airport’s competitive positioning.
Credit Challenges
Only 27% of ORDNext program financing is currently secured, exposing the City to financing and execution risks as the program advances.
Pro-forma leverage is projected to reach exceptionally high levels of approximately $19.8 billion by calendar year 2031, largely attributable to ORDNext, resulting in very high projected airline costs.
Rating Sensitivities
Factors That Could Lead to an Upgrade
Sustained growth in passenger volumes and associated revenues resulting in materially lower airline costs.
Reduction in leverage metrics through amortization of existing debt and/or limitation of additional future bond issuance.
Factors That Could Lead to a Downgrade
Additional issuance of GARBs beyond current expectations that materially weakens financial flexibility.
Although considered unlikely, a sustained decline in passenger traffic and revenues resulting from a major airline de-hubbing event.
Methodologies Applied
The rating was determined in accordance with KBRA’s Public Finance: U.S. General Airport Revenue Bond Rating Methodology and the ESG Global Rating Methodology.
Disclosures
A description of all material information sources utilized in preparing the credit rating, along with details regarding the methodologies, models, and sensitivity analyses applied in determining the rating, is available in the corresponding Information Disclosure Forms.
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