INFRASTRUCTURE AND PROJECT FINANCE CREDIT OPINION 14 October 2021 Georgia Ports Authority New rating for $420 million of bonds Contacts Moses Kopmar Kurt Krummenacker +1.212.553.2846 Vice President - Senior Analyst [email protected] +1.212.553.7207 Associate Managing Director [email protected] CLIENT SERVICES Americas Asia Pacific Japan EMEA 1-212-553-1653 852-3551-3077 81-3-5408-4100 44-20-7772-5454 Summary Georgia Ports Authority's credit profile (senior revenue bonds rated Aa2 stable) reflects 1) excellent financial flexibility, with strong cash generation, low debt, and a competitive and flexible cost structure; 2) powerful market position, as a nationally significant gateway port with growing scale and improving infrastructure capability; 3) above-average growth prospects, driven by supportive regional demographics and opportunities to extend market reach inland; 4) conservative financial management, with improving liquidity and continued low leverage pro forma for planned debt issuance; and 5) favorable governance linkage with the State of Georgia (Aaa stable), which has included significant direct and indirect support in addition to management involvement and alignment on economic development and transportation planning. Robust debt service coverage ratios, in excess of 6.5x through the forecast period, balance volume risk and provide resilience to unanticipated financial challenges. The Port of Savannah will add significant new capacity over the next 10 years, and will have to manage a sizeable and multi-faceted capital spending plan; importantly, the majority of planned spending can be funded internally and is demand driven, which supports our expectation of continued above-average flexibility through the forecast period. Credit strengths » Robust projected debt service coverage: 6.7x minimum, over 9.0x average, including all planned debt issuance through the forecast period » Strong cargo demand from above-average population growth and robust industrial activity in Georgia and the Southeast » Competitive productivity and handling costs as a result of operational/organizational structure » Strong support from the state of Georgia (Aaa stable), which has contributed GO bond proceeds of $350 million for the Savannah Harbor Expansion Project, $550 million for terminal expansion and improvements from 1985-2007, and is expected to provide funding for a new or raised Talmadge Bridge Credit challenges » The Southeast port market is competitive, with ports in Charleston and Norfolk competing to serve cargo in the broader region » Water depth differential with East Coast ports could constrain growth potential
