The city of Chicago may draw on a multi billion US dollar letter of credit (L/C) if the consortium of investors awarded the lease of the city's Midway Airport fails to raise the finance it needs.

The airport is among several privatisation deals arranged by Chicago when access to credit was much easier.

Extension

The Chicago authorities have already given the Midway Investment and Development Corp (MIDC) consortium an extension to find financing for the US$2.52 billion it needs to fulfil its lease deal for Midway Airport.

Now the authorities and the consortium are negotiating for the would-be developers to have up to six months longer to find financing the airport deal.

Standby L/C

If the 99-year lease deal with the consortium does fall through, the city would be able to tap into a US$126 million standby L/C arranged to assure the city authorities that the developers would be able to meet their obligations.

The consortium is made up of Citigroup unit Citi Infrastructure Investors, YVR Airport Services Ltd and John Hancock Life Insurance.

Privatisation plans

The deal was supposed to close in January and was then extended to 6 April.

Chicago also planned privatisation deals for its Chicago Skyway toll bridge and parking services.

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