UPDATE 1-Chicago sets $1 bln airport bond sale for April

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CHICAGO, March 23 (Reuters) - Chicago plans to sell about $1 billion of bonds for O'Hare International Airport during the week of April 18, the city said in a statement on Wednesday.

The third lien general airport revenue bonds, which will finance runway and other projects, will be priced through senior underwriter Citigroup (C.N).

An agreement announced last week between the city and the airport's two largest carriers -- United Continental Holdings Inc (UAL.N) and American Airlines parent AMR Corp AMR.N -- over an ongoing expansion and improvement program at O'Hare, cleared the way for the bonds to be sold, the city said.

Chicago originally scheduled the bond pricing for February, but the deal was postponed after the airlines filed a lawsuit on Jan. 18 seeking to block further financing for the program.

The airlines agreed to a $1.17 billion partial extension of the program and dropped their lawsuit. The deal, however, does not fully cover the $3.36 billion completion phase for O'Hare and the airlines, and the city agreed to hold talks in the future on completing the program.

"These bonds will provide important financing for continuing our key construction projects at O'Hare," said Chicago's Chief Financial Officer Gene Saffold in the statement.

Chicago said it also plans on also selling about $51 million of airport passenger facility charge revenue refunding bonds.

The airport improvement program would give O'Hare eight runways aimed at reducing delays.