Impressed with the Port of Tacoma’s strong financial position, its growing share of the West Coast container market and continuing strong demand for Port facilities, Moody’s Investors Service recently assigned the Port’s $100 million Subordinate Lien Revenue Bonds, Series 2006 an A1 underlying rating. Moody’s has also upgraded to Aa3 from A1 the rating on the Port’s Senior Lien Revenue Bonds and has affirmed the Aa3 rating on the Port’s Limited Tax General Obligation Bonds.

According to Jeff Smith, the Port of Tacoma’s Senior Director of Finance and Administration, only a handful of maritime ports in the United States currently have earned Moody’s Aa rating or higher.

The Port requested the Moody’s review for its upcoming bond issue. “The subordinate lien bonds will be insured, variable rate obligations backed by a liquidity facility and will have a variable-to-fixed interest rate swap,” Smith said, noting that the Moody’s rating upgrade will lower the Port’s revenue bond interest cost. “In addition to lower interest rates, high bond ratings lower bond insurance cost.”

Port bonds are used to help finance the Port of Tacoma’s capital program. In 2005, the Port opened three new container terminals at a capital cost of $240 million. The Port’s five-year capital plan calls for $302 million in new investments, including environmental projects, new terminal development, waterway improvements and other facility enhancements.

“These capital projects strengthen our competitive position on the West Coast and allow our customers to further expand operations here in Tacoma, bringing additional jobs and economic development to our region,” said Port of Tacoma Commission President Connie Bacon. “High bond ratings are a positive reflection of our Port and a positive reflection of the strength of our regional economy.”

In its report, Moody’s cited the Port of Tacoma’s competitive advantages, the projected growth of global trade and the growing, diversifying economy of the Tacoma-Pierce County region. “The Port’s strong management of its revenues and its focus on maintaining a competitive position provide additional credit strength,” the report stated. “The Port has a long track record of closely monitoring its financial and operating performance indicators and has set as goals a number of conservative financial parameters.”