O'Hare revenue bonds downgraded
Jul 22, 2012 (Menafn - Chicago Tribune - McClatchy-Tribune Information Services via COMTEX) --O'Hare International Airport revenue bonds were downgraded Friday, a reflection of several factors that include the slow growth in passengers and the bankruptcy of the airport's No. 2 carrier, American Airlines.
The slowed passenger growth has added to the pressures on Chicago to pay off debt on new runways. The analysis by Moody's Investors Service said the city's finance plan for the current phase of the O'Hare runway expansion effort faces "considerable construction risk" to contain costs and complete the work on time because of "the magnitude and the complexity of the projects."
The work involves building a runway on the south airfield, constructing a south air-traffic control tower and several related projects. American and United Airlines have refused so far to go along with the remaining O'Hare expansion projects, including another new runway, an extension to an existing runway and a western terminal complex housing new gates.
Moody's said it continues to believe the O'Hare Modernization Program is important and will position the airport well for future growth. It also noted that passenger boardings at O'Hare have increased in 2012 after falling below forecast levels during earlier years of the runway expansion project.
Moody's downgraded O'Hare general airport revenue bonds from A1 to A2. The bonds have had a negative outlook for some time, and the downgrade was in part "a ripple effect of the American bankruptcy," Emanuel administration budget spokeswoman Kathleen Strand said.
Moody's affirmed the A2 rating on O'Hare bonds backed by passenger facility charges, which are taxes on airline tickets.
jhilkevitch@tribune.com hdardick@tribune.com
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