Moody’s Investors Service has affirmed the Port of Oakland’s senior lien rating at A1 with a stable outlook.
This rating underscores the Californian port’s robust liquidity, strong debt service coverage ratio, controlled capital expenditure plans, and substantial long-term debt capacity.
Moody’s highlighted several key factors supporting this credit rating:
- A diverse and economically stable service area that drives demand for both cargo and travel.
- The Oakland Seaport’s strategic role as Northern California’s primary trade gateway benefits from a favourable trade balance and limited reliance on discretionary cargo.
- Diversified revenue streams across the airport, seaport, commercial real estate, and utilities sectors, reducing single-sector exposure for bondholders.
- Ample debt capacity to support future capital investments.
“Sluggish post-pandemic maritime and aircraft volumes represent a modest credit headwind, but strong cost recovery in both enterprises will support future revenue stability,” stated Moody’s. “While seaport volume has not grown as much as the broader sector over the last two years, throughput remains relatively stable and seaport revenues are growing. Airport activity is recovering well and should continue normalising in line with the broader sector.”
Despite these strengths, Moody’s noted several challenges, including the potential issuance of new debt for an airport capital project, a planned reduction in cash reserves over the next five years, and relatively weak container volume performance. However, the Port is deemed well-equipped to address these challenges effectively, according to the assessment.
Moody’s believes the ability to manage or mitigate throughput volatility and its strong financial profile positions the Port of Oakland well to “maintain stable credit metrics going forward, and to withstand unexpected economic or other pressures that may arise”.
