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

To access ratings and relevant documents, click here.

Methodologies

• Public Finance: U.S. General Airport Revenue Bond Rating Methodology
• ESG Global Rating Methodology

Disclosures

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

Doc ID: 1011234

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