Chicago, which faces a roughly US$1 billion budget gap next year, has increased a revolving line of credit with RBC Capital Markets by US$100 million and extended the maturity date by more than two years, according to an amendment to an agreement dating to December 2021.

The city requested and RBC Capital Markets and

Royal Bank of Canada

agreed to boost the line to US$325 million, with a maturity date of June 1, 2028, according to the amendment dated Sept. 29 that was modified on Oct. 13. It’s the second amendment to the original agreement, which was previously for US$225 million with a maturity of Nov. 30, 2025.

The increase and extension come ahead of Mayor Brandon Johnson’s budget address on Thursday. The first-term progressive Democrat is scheduled to present a proposal for 2026 that will close a projected deficit of $1.15 billion.

Johnson has limited options to raise revenue. In his first two years in office he rebuffed suggestions to cut jobs or services. Most recently, he’s said his spending plan will reflect threats from the Trump administration to reduce federal funding to the metropolis of about 2.7 million people.

In August, Moody’s Ratings lowered its outlook on the city’s debt to stable from positive and kept the grade at one level above junk.

A spokesperson for the city didn’t respond to an emailed request for comment. RBC declined to comment.

The nation’s third-largest city on Sept. 24 also placed US$100 million in line of credit notes with

Bank of America

that it may tap from time to time, according to an Oct. 3 filing.

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Meanwhile, the Chicago Board of Education this month tapped US$200 million from its short-term revolving credit agreement with PNC Bank. The draw by the cash-strapped district is part of a credit line that’s secured by proceeds from tax-anticipation notes that it sells each year while it waits for property-tax payments, its largest source of revenue.

Bloomberg.com