Port of Seattle Bond Ratings Raised

Already-high ratings increased by one agency, held steady by two others

Standard and Poor's (S & P) raised its ratings on more than $1 billion of outstanding Port of Seattle revenue bonds following a review of the Port in connection with an upcoming issuance of revenue bonds. The ratings upgrade applies to the Port's Intermediate Lien and Subordinate Lien revenue bonds, which were upgraded to "A+" and "A," respectively, from S&P's former ratings of "A" and "A-."

S&P also affirmed its current "AA-" rating on the Port's Senior Lien revenue bonds. Senior Lien revenue bonds are planned to be issued next month to finance approximately $230 million of Seaport construction projects, including the relocation of cruise operations from Terminal 30 to Terminal 91 and the redevelopment of Terminals 25, 28 and 30 into a combined container terminal. Two other rating agencies, Moody's and Fitch, held the port's bond ratings steady.

"Naturally we are very pleased by these ratings," said Port Commission President John Creighton. "It shows that the financial community supports the continued economic development and financial planning here at the Port."

In its notes about the ratings increase, S & P said the agency was basing its decision on the diversity of the Port's revenue base, which includes airport and seaport revenues, as well as the county-wide tax levy. In addition, S & P noted there remains resilient demand for aviation and seaport services, operational and financial diversity, a stable traffic base and a history of strong coverage of annual debt service. It also noted the Port's ability to manage its 2007-2011 capital plan without exceeding current cost estimates.

Moody's noted the Port's "significant and sustained, higher-than-projected financial margins and reserves," as well as growth in the different lines of business. Moody's said the outlook for the Port's ratings is stable, "and based on our expectations that the port will continue to enjoy strong finances as it implements key components of its CIP (capital program) in the next few years."

Fitch noted the Port's high rankings "reflect its importance as a regional transportation provider, diverse revenue streams and management's financial acumen."

"This is a testament both to the Port Commission's commitment to strategic, long-term investment in the economic activity of our region, as well as to the consistent and professional management of our financial team," added Port CEO M.R. Dinsmore.