Fitch Ratings has raised its rating on outstanding Galveston Wharves revenue bonds to A+ from A, the Port of Galveston shared in a press release.
According to Fitch: “The upgrade reflects the port’s sustained growth in cruise activity, which has supported strong financial performance and metrics consistent with an ‘A+’ rating. Fitch expects significant cruise and cargo capital investments completed or underway to support long-term revenue growth.”
Approximately $198.5 million in bonds were issued in 2024 to fund the construction of the port’s fourth cruise terminal, the press release states.
The Fitch announcement further notes that “the rating reflects the port’s sizable market position as a leading cruise-focused port and the largest cruise port in the Gulf of Mexico. While exposure to cruise traffic and tourism makes the port more susceptible to economic cycles, cruise line operating agreements with minimum annual guarantees provide some protection against revenue volatility in a normal operating environment.”
Rodger Rees, Galveston Wharves port director and CEO, commented: “This upgrade continues to reinforce our solid financial position and strong fiscal policy to the investing public. It also confirms the independent rating agency’s strong confidence in the cruise industry. The upgrade directly benefits the port by helping us lower borrowing costs.”
Rees added that the independent evaluation points to a bright future for the port’s cruise business and the plans to reinvest port revenues in infrastructure to grow its 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,” he noted.
The port underlined its plans for a fifth cruise terminal as one example of long-term growth.
Thanks to continued cruise revenue growth and conservative fiscal practices, the port has already invested operating reserves in major capital projects, including a $106 million cargo complex expansion, an internal roadway and other improvements.
