Fitch Ratings has affirmed the bond ratings for the Port of Oakland and upgraded the Port’s outlook from stable to positive.
Fitch has affirmed the following ratings for the Port’s debt:
- A+ for senior lien revenue bonds
- A for intermediate lien revenue bonds
- A for the underlying bank bond rating for the Port’s commercial paper notes
“These bond ratings reflect the Port’s unwavering commitment to prudent financial management and stability. They are a testament to the dedication and professional excellence of our Port staff and the Oakland Board of Port Commissioners,” stated Julie Lam, Chief Financial Officer at Port of Oakland.
According to Fitch, the positive outlook reflects the Californian Port’s diverse revenue sources, which include aviation, maritime, utilities, and commercial real estate operations, along with stable operational performance.
The bond ratings are further bolstered by the passenger traffic at San Francisco Bay Oakland International Airport (OAK), which offers numerous non-stop flights to various destinations and functions as a medium-to-large hub in a competitive market.
Long-term contracts at the Oakland Seaport have also been crucial in maintaining the Port’s financial stability, according to a statement. Fitch noted that the Port has strong leverage metrics for financing assets and a robust capacity to cover debt payments.
Key factors contributing to the upgraded outlook, as cited by Fitch, include the strength of the Port’s revenue base, a manageable capital plan, a solid financial profile, and a sound debt structure.
Port of Oakland continually reviews and assesses its assets and operations to enhance its facilities at both the Airport and Seaport. Port of Oakland aims to expand and enhance business opportunities to support the regional economy while maintaining responsible fiscal management.
Strong fiscal oversight enables the Port to proceed with vital capital investment projects, improving facilities and infrastructure, retaining existing customers, attracting new business, and building revenue streams.
Immediate capital plans include enhancing the customer experience at OAK, investing in aviation and maritime infrastructure projects, and supporting initiatives to achieve zero-emissions goals at both the Airport and Seaport.
Furthermore, visible changes at the Airport include new retail and food and beverage offerings, providing travellers with more options. Additionally, the Port is investing in infrastructure upgrades to improve the overall passenger experience within terminal buildings.
Port of Oakland noted that investments in the electrification of Port and tenant businesses is a priority to achieve zero-emissions operations. The Port is expected to play a key role as an investor and partner in major electric infrastructure projects that will enhance power system reliability and provide additional peak capacity at both the Airport and Seaport when demand is high.
