MIAMI-The port of Miami is currently selling a record $389 million of debt to help boost its cargo business in preparation with the widening of the Panama Canal.
Investors are not pleased however with the port's ballooning debt that has seen its bond load triple in the last four years, according to Bloomberg News. For example, Moody's Investors Service recently cut the port's debt rating to four steps above junk, citing the growing debt load. Meanwhile, bondholders have pushed the extra yield over benchmark debt close to the highest level since February.
“It's a borderline credit, it was just recently downgraded and the trends don't look good at this point,” says Burt Mulford, a portfolio manager at St. Petersburg, FL-based Eagle Asset Management Inc. “We're taking a pass.”
The port of Miami is undertaking a $5.25-billion canal expansion, to be completed in 2015 that will allow cargo ships carrying the equivalent of 13,000 20-foot containers to negotiate the 50-mile passage.
“When Panama comes on line, we in Miami will be big-ship ready,” Bill Johnson, director of the port of Miami, said. See story at Bloomberg News.
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