Finance: Palm Beach

 

Moody’s Investors Service has revised the Port of Palm Beach’s rating outlook to positive from stable and affirmed the port district’s Baa3 rating. 

 

The positive outlook recognizes the port’s sustained financial improvement due to successful contract renewals with its largest tenants that now extend through the maturity of the port’s outstanding debt. The outlook reflects Moody’s expectation that margins will continue to be on par with those experienced over the last four fiscal years, supported by tenant minimum annual revenue guarantees that improve the port’s cash flow predictability.

 

The positive outlook reflects Moody’s view that the port’s extension of its long-term contracts with its largest customers, including Tropical Shipping and Bahamas Paradise Cruise Line, provides a higher level of revenue predictability to support sound financial metrics, despite exposure to economically sensitive business partners and trade routes within the highly competitive South Florida market.

 

The port’s credit strengths include a notable improvement in financial margins over the last five fiscal years, liquidity of approximately 820 days of cash on hand at the end of fiscal year 2016, and low leverage, which provides financial flexibility and capacity for future capital investment.

 

"One thing to note that is important is that Baa is an investment grade; people that invest in bonds need investment grade bonds which the port falls into," said Blair J. Ciklin, chairman of the Board of Commissioners for the Port of Palm Beach District. "Baa3 is a very good rating for a port. It’s very satisfying to know that the Port of Palm Beach has an investment grade rating which is very important."