Moody’s Investor Services assigned a stable outlook to the Brownsville Navigation District and reaffirmed a high “A2” credit rating on its revenue bonds.
The stable outlook reflects Moody’s view that “the port will maintain ample liquidity supported by strong operating cash flow margins.”
Moody’s noted the Port of Brownsville’s “competitive position for cross border trade as well as the upside potential of near-term projects at the port and major private sector investments” in maintaining the $32 million bonds’ high A2 score. The rating defines the port as among average for “upper-medium grade and are subject to low credit risk.”
Moody’s rated senior lien revenue bonds issued by the Brownsville Navigation District as A2 when first issued in 2016. It explained that “the A2 rating reflects the district’s role in serving a major regional economy” and “its ability to handle a variety of cargo types.” It also added that “the rating reflects a multi-year trend of improving financial performance.”
In reaffirming the A2 score this year, Moody’s cited “the upside potential of near-term projects at the port and major private-sector investments,” highlighting the three proposed LNG terminals, the channel-deepening project, a new weekly container-on-barge service providing low-cost connections to East Coast markets, the new Liquid Cargo Dock 6, the new South Port Connector Road, storage capacity expansion and other recent enhancements.
The service added that the BND “currently benefits from a strong financial position, with a long history of very strong debt service coverage ratios and low leverage.”
“The Port of Brownsville takes our financial responsibilities very seriously and this A2 rating is a testament to the diligence of the Board of Commissioners and the entire port staff. Moody’s stable outlook reflects on the port’s multiyear trend of strong financial stewardship,” said Brownsville Navigation District Chairman Sergio Tito Lopez. “Our community relies heavily on the port as an economic driver and job creator for the entire Rio Grande Valley, and it is important that we continue to make wise and careful decisions for future generations.”
In May 2020, Moody’s ranked the Port of Brownsville third highest among U.S. ports for “strong financial resilience” in face of COVID-related economic impacts, rating the port among the most stable in the nation to weather the pandemic’s unique economic challenges.