AAPA Seaports Advisory

Finance: Canaveral, Oakland

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Moody’s Assigns Port Canaveral Revenue Bonds A2 Rating and Affirms Stable Outlook

Port Canaveral has received "A2" ratings from Moody’s Investors Service on some $32.715 million in proposed revenue refunding bonds series 2016C (AMT) and $27.045 million in 2016D (non-AMT) issued bonds. Moody’s also affirmed a stable financial outlook for Port Canaveral.  The agency based its determinations on the port’s strong position in the cruise market; cargo growth; stable finances and pro-active capital plan management.

Port Canaveral ranks among the world’s top three cruise ports based on passenger volume. About 80 percent of the port’s revenue comes from the cruise sector.  Port Canaveral’s cargo operations, which have expanded with new container and auto terminals and services, are benefiting from the improving economy in Florida.

"Maintaining stable bond ratings is a team effort and our business model requires us to be able to respond to changing market conditions," said Roger Rees, the port’s deputy executive director and chief financial officer. "Moody’s stable bond rating enables us to continue to access the financial markets on a favorable basis, which allows the port authority to provide infrastructure needed to service and maintain our customers."

Port of Oakland Revenues Steady in FY 2017, Debt upgraded by Fitch Ratings

Port of Oakland operating revenue remained steady in FY 2016 despite the loss of a tenant due to bankruptcy. The year-end total of $338 million beat the previous record, $336.6 million in FY 2015, by 0.4 percent. July/June is the port’s fiscal year.

Operating revenue in the Aviation Division increased 6.7 percent, offsetting a 6.2 percent decrease incurred by the Maritime Department resulting from the departure of a marine terminal operator. The operator, Outer Harbor Terminal, LLC, severed its lease agreement with the port after filing for bankruptcy last February. The Airport Division benefited from an 8 percent jump in passenger traffic and higher terminal rental rates.

The port’s FY 2016 revenue by business line:

  • Aviation: $173.1 million (up 6.7 percent from FY 2015)
  • Commercial Real Estate: $16.2 million (+2.7 percent)
  • Maritime: $148.8 million (- 6.2 percent)

The port says the 2017 outlook is positive for all three business lines, but cautions it will be a transition year in maritime.

That optimism is apparently shared by Fitch Ratings, which on October 14 upgraded the rating on the port’s intermediate lien revenue bonds to "A" from "A-" and affirmed its ‘A+’ rating on the port’s senior lien revenue bonds.

Fitch said the ratings reflect diverse revenues from the port's aviation, maritime, and commercial real estate operations.

It also found that the port benefits from its "sizeable enplanement base" and "maritime cargo operations within the large, economically diverse, and wealthy San Francisco Bay Area" Fitch said the upgrade of the intermediate bonds reflects the port's progressive deleveraging and debt service coverage ratios having exceeded the rating agency’s base case expectations.



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