Standard & Poor has raised the long-term rating on the Cleveland- Cuyahoga County Port Authority’s development revenue bonds to ‘BBB+.
The outlook is stable. In September, Standard & Poor’s upgraded the rating to BBB/Stable. The Port has since secured a new Letter of Credit (LOC) with FirstMerit Bank N.A., headquartered in Akron, Ohio. The characteristics of the new LOC were cited as the prime reason for the upgrade.
Port bonds are issued through a program that has a pooled collateral system of reserves, with the most significant one being the LOC. “This action is welcome and will translate into lower costs for borrowers, making our program even more competitive,” said Will Friedman, the Port’s President and CEO. “Our goal was to increase the rating on our Program in 2012 – and we accomplished that twice.”
The Port’s bond fund program has been an important economic development tool for the region, helping a wide range of smaller manufacturers expands their operations with new construction. Since 1997, the Port has issued bonds for 29 projects with approximately $129 million in principal. The current outstanding principal is $65.7 million.
The fixed-rate financing program benefits organizations that do not have their own investment-grade rating and rely on the Port’s to access the capital markets. It also helps entities that need to structure a transaction with multiple layers of financing. The program typically finances $1.5 million to $9 million in project costs.
The Cleveland-Cuyahoga County Port Authority operates the Port of Cleveland, a leading gateway for waterborne trade on the Great Lakes/St. Lawrence Seaway System.