CITY OF CHICAGO RECEIVES TRIO OF RATING UPGRADES FOR O’HARE INTERNATIONAL AIRPORT

 CITY OF CHICAGO RECEIVES TRIO OF RATING
UPGRADES FOR O’HARE INTERNATIONAL AIRPORT

CHICAGO — Mayor Lori E. Lightfoot has announced
that S&P Global Ratings (S&P) and Fitch Ratings (Fitch) have
upgraded their long-term ratings for Chicago O’Hare International
Airport (O’Hare) General Airport Revenue Bonds (GARB) by
one notch from “A” to “A+” with a stable outlook. S&P has also
upgraded the Passenger Facility Charge (PFC) long-term rating
from “A” to “A+” with a stable outlook.

This is the first set of rating upgrades on O’Hare in six to
seven years. The last time S&P and Fitch upgraded O’Hare was
in 2015 and 2016, respectively. In the first year of the COVID-19
pandemic, O’Hare was also one of the few large hub airports not
downgraded by S&P, proving the competitive market strength of
the airport.

“The O’Hare Modernization Program (OMP) was a
once-in-a-generation investment in O’Hare’s runway system,
transforming our hometown airport into the most capable civilian
airfield in North America,” said Mayor Lightfoot. “Today’s news
from the rating agencies is further evidence of our ability to deliver
new airport development and the jobs and contracting opportunities that come with it, as O’Hare turns its eyes to a complete revamp of its terminals in O’Hare 21.”

The upgrade is due a number of factors, including:
Air traffic has recovered to about 80% of pre-pandemic
levels. Early indications show traffic recovery will continue to
improve this year and beyond.

O’Hare financial metrics have improved materially since
2015. Debt service coverage has increased from 1.08x in 2015
to 1.36x in 2022. Liquidity has improved from 167 days in 2015
to 476 days in 2022. The City improved these financial metrics
over the last three years despite the challenges brought on by the
COVID-19 pandemic.

The $1 billion redevelopment of Terminal 5 is nearing
completion. Ten new gates will open in phases at Terminal 5 and
a grand opening is planned for later this year, creating about 25%
of the total expected capacity expansion of the airport capital plan.
This major component of the capital plan nearing completion
lowers risk for the airport overall.

“The rating upgrades are a testament to the efficient operations
at O’Hare and the continued demonstrated ability of O’Hare
to complete one of the largest expansion projects in the country,”
said Commissioner Jamie L. Rhee of the Chicago Department of
Aviation (CDA), which owns and operates O’Hare. “The OMP
reduced avoidable delays by 65%, allowing us to fully pivot to
O’Hare 21, a phased, $8.5 billion reimagining of the passenger
experience from curb to gate.”

The City is planning to issue senior lien general airport revenue
and refunding bonds as well as customer facility charge (CFC)
bonds, aggregating to about $2 billion. Approximately $1.3 billion
will be used to fund capital projects, and approximately $700
million will be used to refund outstanding bonds for near-term
interest rate savings without extending the existing final maturity.

“These ratings upgrades come at an opportune time for the
City given the sizeable, planned issuances to finance O’Hare 21
over the next 10 years.” said Jennie Huang Bennett, Chief Financial Officer. “The City expects to aggressively place its upcoming bond issue given the strength of these ratings and the improvement in O’Hare’s financials, which will lower debt service costs and maintain competitiveness at O’Hare.”

S&P and Fitch both comment on the underlying strength of
the air trade area and the recovery in traffic volume since the onset of the COVID-19 pandemic.

“We have returned ORD’s market position assessment to
extremely strong... reflecting ORD’s continued recovery in air
travel demand that we believe is sustainable,” said S&P in their
rating report.

Learn more at ord21.com.

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