Despite facing the wrath of Hurricane Beryl, Galveston Wharves is pushing forward with its $160 million revenue bond sale. The once-Category 5 storm may have caused operational interruptions, but the port is showcasing its resilience by continuing with its scheduled activities. Port director and CEO, Rodger Rees, highlighted the port’s strength by pointing out that a Royal Caribbean cruise ship set sail just a day after the storm.
Prior to the bond sale, S&P Global Ratings upgraded the rating on the wharves and terminal first lien revenue bonds to A from A-minus. This upgrade reflects the increasing revenues from cruise activity and investments made at the port, which are expected to enhance financial metrics. Fitch Ratings also revised the outlook on its A-minus rating to positive, citing significant revenue growth following the full resumption of cruise activity.
The Port of Galveston experienced a decline in cruise passengers in 2020 due to the COVID-19 pandemic, but bounced back in 2023 with a record 1.49 million passengers. The deep-water port serves multiple cruise lines, with plans for additional growth in the coming years. Cruise-related activity accounts for a significant portion of the port’s operating revenue, making it a key focus for future development.
The revenue bonds are secured by the port’s net revenue generated from its various operations, including cruise, commercial, and cargo activities. Proceeds from the bond issue will finance a new cruise complex at Pier 16, which includes a terminal, parking garage, and other improvements. The structured maturities of the bonds will provide financial stability for the port’s development projects.
In the aftermath of Hurricane Beryl, President Joe Biden granted Texas’s request for a major disaster declaration. This declaration will provide financial assistance for debris management and emergency protective measures. Moody’s Ratings analyst Nick Samuels highlighted the economic vulnerabilities in the area, emphasizing the significant impact that hurricane damage can have on the region’s economy.
Overall, the resilience of Galveston Wharves in the face of natural disasters like Hurricane Beryl showcases the port’s commitment to providing top-notch service and maintaining financial stability. With continued support from ratings agencies, government assistance, and a focus on future growth, the port is well-positioned to weather any challenges that come its way.