- Moody’s Investors Service has affirmed the Port of Oakland’s senior lien rating at A1 stable, reflecting strong liquidity, robust debt service coverage, and significant long-term debt capacity.
- The Port’s diversified revenue streams and critical role in Northern California’s economy contribute to its strong credit position.
- Despite challenges like potential new debt and slower container volume growth, Moody’s highlights the Port’s resilience and capacity to maintain stable credit metrics.
Recognition of Financial Strength
Moody’s Investors Service has reaffirmed the Port of Oakland’s senior bond rating at A1 stable, underscoring the Port’s strong financial management and liquidity. Julie Lam, Chief Financial Officer of the Port of Oakland, stated, “The rating reflects the Port’s commitment to fiscal responsibility,” emphasizing its revenue diversity and economic significance to Northern California.
The A1 stable rating highlights key credit strengths, including:
- A diverse and economically stable service area driving demand for cargo and travel.
- The Oakland Seaport’s pivotal role as Northern California’s primary trade gateway, benefiting from a favorable trade balance and limited exposure to discretionary cargo.
- Revenue diversification across airport, seaport, commercial real estate, and utilities sectors, mitigating single-sector risk for bondholders.
- Substantial debt capacity enabling future capital investments.
Addressing Challenges
While Moody’s acknowledges challenges such as a planned reduction in cash reserves over five years, new debt associated with airport capital projects, and weaker container volume growth compared to the broader sector, the Port’s robust financial framework positions it to navigate these headwinds effectively.
Moody’s noted, “Sluggish post-pandemic maritime and aircraft volumes represent a modest credit headwind, but strong cost recovery in both enterprises will support future revenue stability.” Seaport revenues are growing despite slower volume increases, and airport activity is steadily normalizing.
Future Outlook
Moody’s affirms that the Port of Oakland’s ability to mitigate throughput volatility and sustain a strong financial profile ensures its preparedness to handle unexpected economic or operational pressures. This positions the Port to maintain stable credit metrics while continuing to support Northern California’s economy through its diversified operations and strategic investments.
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Source: Port of Oakland
