Fitch Ratings Affirms ‘A’ Rating and ‘Stable’ Outlook on Canaveral Port Authority Revenue Bonds
By Space Coast Daily // November 28, 2019
Fitch said Port’s cruise traffic continues to be strong
BREVARD COUNTY • PORT CANAVERAL, FLORIDA – Nationally recognized credit rating agency Fitch Ratings has issued an ‘A’ rating for approximately $137 million in Canaveral Port Authority (CPA) port revenue bonds with the Port’s bond rating outlook affirmed as ‘Stable.’
Fitch stated the Port’s cruise traffic continues to remain strong and drives the port’s stable operating profile.
In its annual review, Fitch noted its ‘A’ rating reflects Port Canaveral’s market position as one of the leading cruise-focused ports on the U.S. East Coast, its aggressive yet flexible capital program, and its conservative debt structure.
“A favorable review from a highly-regarded rating agency like Fitch is a strong endorsement of the Port’s financial health and stability,” said Port Director and CEO Capt. John Murray.
“Our ‘A’ rating and ‘Stable’ outlook affords us the ability to continue making sound investments in improving and developing our infrastructure to ensure we remain competitive in a global marketplace.”
In fiscal 2019, the Port’s total operating revenue increased 4.8 percent to $106.6 million with cruise business accounting for approximately 77 percent.
Cargo revenue growth and throughput at the Port has been “impressively high” in recent years, the agency noted, and is driven by Central Florida’s economic growth, providing diversification for a growing portion of the Port’s revenue.
“Fitch’s high ratings assessment with a Stable outlook designation underscores the importance of having a sound fiscal management policy and practice,” said Michael B. Poole, Canaveral Port Authority’s Chief Financial Officer. “It helps open more opportunities to the Port for supporting responsible growth and strengthens our ability to meet current business demands.”
The Port’s current five-year capital plan (FY2020 to FY2024) totals $345 million and includes the new Cruise Terminal 3 expansion in partnership with Carnival Cruise Line, as well as improvements to Cruise Terminals 8 and 10 in conjunction with Disney Cruise Line.
Fitch views positively the involvement from the Port’s cruise partners, noting past developments of Cruise Terminal 8 with Disney and Cruise Terminal 1 with Royal Caribbean Cruise Line in its report.
Remaining Port projects have a cargo focus, as the Port continues to capitalize on its available capacity relative to nearby, competing ports.
Fitch noted that Port Canaveral “has demonstrated a favorable track record of project delivery with no material cost overruns to date, and its projects remain generally flexible in the event of lower-than-expected cash flow.”
Fitch Ratings 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.