| Code: 101571 |

 TIN news:   Refunding Revenue Bonds Refunding Revenue Bonds 2016 Series A; Rating: Aa2; Rating Type: Underlying LT; Sale Amount: $98,415,000; Expected Sale Date: 09/21/2016; Rating Description: Revenue: Government Enterprise;
Issue: Refunding Revenue Bonds 2016 Series B; Rating: Aa2; Rating Type: Underlying LT; Sale Amount: $64,980,000; Expected Sale Date: 09/21/2016; Rating Description: Revenue: Government Enterprise;
Issue: Refunding Revenue Bonds 2016 Series C (Green Bonds); Rating: Aa2; Rating Type: Underlying LT; Sale Amount: $32,520,000; Expected Sale Date: 09/21/2016; Rating Description: Revenue: Government Enterprise;
Summary Rating Rationale
Moody’s Investors Service has assigned Aa2 to the Los Angeles Harbor Department, CA (Port of Los Angeles (POLA)) $196 million Refunding Revenue Bonds, Series 2016ABC. Moody’s has affirmed the port’s $909 million parity obligations at Aa2. The outlook is stable.The Aa2 rating reflects the port’s strong market position, advantaged geographic location and superior physical infrastructure, strong financial position, and manageable debt burden.
Rating Outlook
The stable outlook reflects our view that the port’s credit profile will remain stable in the short- to medium-term due to a reduction in debt, a limited capital expenditure plan, and a strong financial position supported by a comfortable liquidity profile and long-term leases with substantial minimum annual guarantees.
Factors that Could Lead to an Upgrade
The rating is unlikely to be upgraded from the Aa2 level, but upward pressure would result from material and sustainable improvements in POLA’s market position and financial metrics
Factors that Could Lead to a Downgrade
Significantly weakened market position leading to deterioration in financial metrics
Legal Security
The bonds are secured by a senior lien on the net revenues of the port. The rate covenant and additional bonds test are equal to 1.25 times debt service. The debt service reserve requirement is sized at the lesser of 125% of average annual debt service, maximum aggregate annual debt service, or 10% of proceeds of all parity obligations. The debt service reserve requirement is fully cash funded.
Use of Proceeds
Proceeds will be used to refund the port’s 2006A, 2006B, 2006C and 2009B bonds for savings, estimated at 15% of refunded par, with no extension of maturities.
Obligor Profile
The Harbor Department of the City of Los Angeles is a proprietary, or independent, department of the city, with possession, management and control of the Port of Los Angeles, which is located in San Pedro Bay, approximately 20 miles south of downtown Los Angeles. The department operates the port independently from the city, using its own revenues, and administers and controls its fiscal activities, subject to oversight by the city council. Under the charter, the department is a proprietary, or independent, department of the city similar to the Department of Water and Power and Department of Airports.The Department has three major sources of revenue: i) shipping revenue, which is a function of cargo throughput; ii) revenue from the rental of the Port’s land and buildings (i.e., revenue from permit and lease agreements); and iii) fees and royalty revenue. The port covers approximately 7,500 acres (4,300 acres of land and 3,200 acres of water). The port generally encompasses approximately 43 miles of waterfront berthing and 27 terminal facilities, including eight major container cargo terminals, four break-bulk facilities, three dry bulk facilities, seven liquid bulk cargo terminals, two passenger cruise terminals, one vehicle handling facility, and two multi-use facilities.
Methodology
The principal methodology used in these ratings was Public Port Revenue Bonds published in December 2013. Please see the Ratings Methodologies page on www.moodys.com for a copy of this methodology.

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