The Galveston Wharves announced that it is moving forward with its $160 million bond offering on July 16, despite operations being disrupted by Hurricane Beryl on July 8.
“It shows how strong and resilient our port is that a day after the Category 1 hurricane buffeted the region, a Royal Caribbean cruise ship sailed from Galveston,” said Rodger Rees, Galveston Wharves port director and CEO.
The storm, with winds reaching 80 mph, caused widespread damage in the greater Houston/Galveston area, leaving more than 2 million people without power. According to Rees, the Port of Galveston sustained relatively minor damage and experienced some power outages.
A day after the storm, port staff collaborated with port partners to safely begin reopening the port for business. Following the cruise ship’s departure on July 9, the port resumed cargo operations on Wednesday, July 10.
The port is set to issue a revenue bond package of up to $160 million to fund the new cruise complex at Pier 16, which includes a terminal, parking garage, and other improvements, as well as bond issuance costs. Hilltop Securities and Piper Sandler Companies are co-managing the financing.
Ahead of the bond offering, Standard & Poor’s (S&P) Global Ratings upgraded Galveston Wharves revenue bonds from A minus to A for the proposed issuance to fund a fourth cruise terminal. Galveston Wharves operates the Port of Galveston, the fourth most popular cruise port in the U.S.
According to S&P, “The upgrade reflects our view of the increasing revenues from cruise activity and associated parking revenues from investments made at the port, which we expect will sustain improved financial metrics.”
Additionally, Fitch Ratings has upgraded its outlook for port revenue bonds from stable to positive, while holding its A minus rating.
Rees said: “This independent evaluation points to a bright future for the port’s cruise business and our plans to reinvest port revenues in infrastructure to grow our cruise, cargo and commercial business sectors. This improved bond rating will allow us to fund the bonds at a lower interest rate, which is always great news.”
