Canaveral Port Authority Revenue Bonds Earn Favorable Endorsements from Moody’s and Fitch Ratings
By Space Coast Daily // December 17, 2018
Planned issuance of a series of bonds for approximately $75 million
Ratings Reflect Port’s Strong Cruise Market Position, Sound Fiscal Management and Healthy Financial Metrics
BREVARD COUNTY • PORT CANAVERAL, FLORIDA – The Canaveral Port Authority’s planned issuance of a series of bonds for approximately $75 million in proceeds has been reviewed and assigned favorable ratings by two nationally recognized statistical rating organizations.
Fitch Ratings has assigned an ‘A’ rating to Canaveral Port Authority port revenue bonds, Series 2018 A&B. Fitch has also affirmed its rating on $63 million in outstanding Port Facilities Revenue Bonds. The Rating Outlook on all bonds is Stable.
Moody’s Investors Service has assigned an ‘A2’ rating to the CPA’s issuance of Port Improvement Revenue Bonds, Series 2018A (AMT) and Port Improvement Revenue bonds, Series 2018B (Non-AMT). Moody’s also affirmed the A2 ratings on Port Canaveral’s outstanding Port Revenue Bonds Series 2016C and Series 2016D. The outlook is Stable.
Earlier this month, the Canaveral Port Authority Board of Commissioners unanimously approved a resolution to issue a series of bonds to provide financing for Port Canaveral’s Cruise Terminal 3 project.
The new terminal will be the homeport for Carnival Cruise Line’s Mardi Gras, the newest and largest cruise ship in Carnival’s fleet, as part of a long-term operating agreement signed by Carnival with the Port Authority.
“The strategic investments in our infrastructure are the foundation of our ability to keep pace with the growth expectations of the cruise industry,” Port CEO Capt. John Murray stated.
“These credit agency reviews are significant endorsements of the Port’s financial stability, and their high ratings assessments certified by qualified institutional buyers, underscore the importance of having a sound fiscal management policy and practice.”
In its report, Fitch stated its ‘A’ rating “reflects the Port’s market position as one of the leading cruise-focused ports on the U.S. East Coast.”
The rating also reflects the Port’s “established operating history, aggressive yet flexible capital program, and conservative debt structure, which have led to modest leverage and solid coverage metrics when compared with the Port’s peers in the ‘A’ category,” according to Fitch. The agency also noted that “contracts with key cruise lines help to insulate revenue from volume fluctuations.”
In Moody’s ratings rationale, the agency reported that its A2 port revenue bond ratings “benefit from the Port’s established competitive position as the second largest cruise port in the world and in the U.S. behind the Port of Miami. Around 50-percent of the Port Authority’s operating revenue is covered by minimum annual revenue guarantee contracts, which support a degree of revenue predictability.”
“The stable outlook reflects the continued positive outlook for the cruise industry in 2019 and our expectation that Port Canaveral will maintain a Moody’s DCSR (debt service coverage ratio) above 2.0X, and the authority’s flexibility to scale back capital expenditures if needed to maintain healthy financial metrics and an adequate liquidity profile,” the agency continued.
Fitch Ratings Inc. is one of three nationally recognized statistical rating organizations (NRSRO) designated by the U.S. Securities and Exchange Commission. The agency is dual-headquartered in New York and London.
Moody’s Investors Service is a leading provider of credit ratings, research, and risk analysis. The New York City-based firm’s ratings and analysis track debt covering more than 135 countries.
CLICK HERE FOR BREVARD COUNTY NEWS