On Wednesday, Moody’s Investors Service (Moody’s) revised the Port of Palm Beach’s rating outlook to positive from stable and affirmed the 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, provide a higher level of revenue predictability that are forecast 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, strong 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.”
On Thursday, Moody’s issued a Credit Opinion for the Port of Palm Beach with more information on the affirmation of the Baa3 rating published on Wednesday. To view Moody’s Press Release and Credit Opinion, click the links below:
About Port of Palm Beach
Located in Riviera Beach, the Port of Palm Beach is a full-service, diversified port, offering cruise and cargo services to more than 30 onsite tenants and users. At 162 acres, the Port’s efficiency is unparalleled, processing more than $7 billion in commodities, 2.5 million tons of cargo, and 500,000 cruise passengers annually. As one of the largest employers in Palm Beach County, the Port of Palm Beach and its tenants employ more than 2,850 people. Through the contribution of more than $185 million in business revenue and $17.5 million in tenant-contributed state and local annual tax revenue, the Port of Palm Beach is a large economic engine in South Florida. For more information, visit www.portofpalmbeach.com.
About Moody’s Investors Service
Moody’s Investors Service is a leading provider of credit ratings, research, and risk analysis. Moody’s commitment and expertise contributes to transparent and integrated financial markets. The firm’s ratings and analysis track debt covering more than 135 sovereign nations, approximately 11,000 corporate issuers, 21,000 public finance issuers, and 72,000 structured finance obligations. Moody’s Investors Service is a subsidiary of Moody’s Corporation (NYSE: MCO), which reported revenue of $3.6 billion in 2016, employs approximately 11,700 people worldwide and maintains a presence in 41 countries. Further information is available at www.moodys.com.