PortMiami to issue $200 million in commercial paper
Miami-Dade County commissioners voted Tuesday to allow PortMiami’s capital improvement program to issue commercial paper notes of up to $200 million on a rolling basis to finance ongoing upgrades to terminals and infrastructure.
Commercial paper notes are short-term, unsecured financing that can often be less expensive than bank lines of credit so long as the issuer has excellent credit ratings. No collateral is required to secure repayment of the notes, another significant advantage of the issuer.
The port will use the funds for temporary cash flow to continue improving facilities at both its cruise and cargo segments, including ongoing terminal expansion to accommodate larger cruise ships, building a new cruise terminal, acquiring new cranes for loading and unloading cargo on larger ships, acquiring and developing an inland location to handle containers, and upgrading automation at truck gates.
The ordinance also foresees the issuance of $400 million in additional port revenue bonds that would pay off the commercial paper notes and provide further funding. Ultimately, the new financing would be paid for from the appropriation of “legally available non-ad-valorem revenues” of the county, according to the legislation, but not increased taxes.
The port currently has over $1 billion of outstanding debt, including $569 million in revenue bonds, $78 million in general obligation bonds, $288 million in Sunshine State loans and $106 million in capital acquisition bonds. It last issued debt in 2014 to support infrastructure projects, including dredging the port deeper to allow larger ships to enter.
The commercial paper program will provide interim financing for the port’s five-year capital improvement program, most of which has already been approved by the county commission.