Moody’s Upgrades Port Canaveral’s Bond Rating
Moody’s Investors Service has upgraded Canaveral Port Authority’s $30.2 million in outstanding revenue bonds to A2 from A3 and rated its financial outlook stable. The upgrade was attributed to low leverage, cruise growth, stable finances and proactive capital plan management.
Port Canaveral’s five-year capital plan totals nearly $600 million, which will be financed with a combination of grants, matching funds, cash flow and unrestricted cash balances. The major current project is a new cruise terminal for Royal Caribbean, which is paying half of the $105 million total cost.
Moody’s viewed as a strength, the Port Authority’s 35-year lease with GT USA, the U.S. subsidiary of privately-owned international cargo operator Gulftainer,mto develop Canaveral’s container terminal. The agreement includes minimum guarantees and $100 million of investments in infrastructure, equipment and labor. The terminal begins operations at the end of this year.
“We continue to strengthen our financial profile by growing our cruise business with market leaders and partnering with global cargo operator Gulftainer as we enter into the container business,” said Port Canaveral CEO John E. Walsh.
According to Chief Financial Officer Rodger Rees, “The guaranteed minimum throughput and Gulftainer’s significant capital investment help to minimize our risk as we diversify our revenue base.”
At the end of 2013, Canaveral had $98.5 million in total outstanding port revenue bonds.