CHICAGO (STMW) – Mayor Rahm Emanuel’s administration on Friday took its second hit in one week from a Wall Street rating agency when Moody’s Investors Service dropped the bond rating on billions of dollars in O’Hare Airport bonds about to go to market.

Moody’s dropped the rating from A2 to A1 on $6.5 billion general airport revenue bonds retired by airport revenues. The rating agency retained the A2 rating on a smaller chunk of O’Hare bonds retired by ticket tax revenues known as the “passenger facility charge” (PFC).

“The downgrade is based on the airport’s high leverage and narrow financial margins as it navigates difficult economic and industry environments and the construction risk inherent in its large capital construction plan,” Moody’s analysts wrote.

Last week, the Chicago Public Schools bond rating took a hit, thanks to a $5.7 billion school budget that leaves the system without a penny in the bank, builds in a two percent pay raise for teachers being asked to work a 20 percent longer school day and sets the stage for a $1 billion school deficit next year.

City Hall sources argued that the O’Hare downgrade would have little impact on city borrowing costs, since O’Hare bonds have had a “negative outlook for some time” and have been “trading below their rating,” in part because of the American Airlines bankruptcy.

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