Port of Seattle gets upgrade lift ahead of bond deal
3 min read
Alaska Air Group
A bond rating upgrade will help set the Port of Seattle up for a $761 million bond sale next week.
Moody’s Ratings Wednesday lifted the enterprise’s intermediate lien rating to Aa3 from A1, citing its “strong competitive position” as an airport and seaport operator, the region’s growing, high-income economy, and its sound financial flexibility and management.
Senior manager Morgan Stanley plans to price $761 million of intermediate lien bonds for the port Aug. 5, according to an online investor presentation about the deal.
Moody’s also upgraded the port’s junior lien to A1 from A2 and affirmed the port’s first lien obligations at Aa2. The outlook for the junior and intermediate lien, previously positive, was revised to stable at the higher rating and the first lien retained its stable outlook.
Seattle-Tacoma International Airport is the port’s largest component, representing more than 84% of its 2024 operating revenues, according to the investor presentation.
The remainder comes from maritime operations, including its
The airport has a “near monopoly” on the region’s passenger traffic, Fitch Ratings said in affirming its AA-minus intermediate lien rating and stable outlook ahead of the deal. S&P Global Ratings also affirmed its ratings ahead of the deal: AA-minus for intermediate lien, and AA for outstanding limited tax general obligation and first lien revenue bonds. Outlooks are stable.
Sea-Tac is the primary hub of Alaska Airlines and a major hub for Delta Air Lines, but 70% of its passenger count is origin-and-destination traffic, the presentation said.
The investor presentation plays up the wealth and growth of the region the airport serves, with King County’s population growth and per-capita income growing faster than that of the nation and of Washington state.
In 2024, enplanements of 26.3 million set a record, exceeding Sea-Tac’s pre-pandemic best from 2019.
International traffic has also fully recovered from the pandemic, airport officials say.
Sea-Tac is served by 25 foreign carriers and Delta, which already operated transoceanic flights from its Sea-Tac hub, has been joined by Alaska Air Group, which launched service to Tokyo this year, with plans for service to Rome and Seoul.
The port has a $5.9 billion 2025-2030 capital improvement plan, including $4.9 billion for the airport, highlighted by expansions to two concourses, the renovation of another and redevelopment of the airport’s main terminal, according to the presentation.
“Although the port’s substantial CIP will likely lead to modest deterioration in debt service coverage, we believe the management team will adjust its debt and spending plan to maintain strong financial results, including coverage above 1.25x,” S&P said in its ratings release.
The port has $4.2 billion of outstanding revenue bond debt.
The municipal market has seen a steady stream of airport revenue bond deals this year, including sales for airports in Salt Lake City,
Next week’s deal consists of a $75.7 million Series 2025A, with interest not subject to alternative minimum tax, $662.6 million of Series 2025B tax-exempt AMT bonds, and a $22.8 million taxable Series 2025C.
Piper Sandler is municipal advisor. Pacifica Law Group is bond counsel.
