Port Galveston (Texas USA) is proceeding with its US$160 million bond offering on July 16th, despite the interruption caused by Hurricane Beryl on July 8th.
Rodger Rees, Galveston Wharves port director and CEO, emphasized the port's resilience, noting that a RCI/Royal Caribbean cruise ship sailed from Galveston just a day after the Category 1 hurricane impacted the region with 80 mph winds. While the greater Houston/Galveston area experienced significant damage and power outages affecting over 2 million people, the Port of Galveston sustained only minor damage and some power disruptions. Port staff, in coordination with partners, quickly began reopening the port, resuming cargo operations by July 10.
The port is set to issue a revenue bond package of up to US$160 million to finance the construction of a new cruise complex at Pier 16. This project includes a terminal, parking garage, and other enhancements. The financing is co-managed by Hilltop Securities and Piper Sandler Companies.
Ahead of this bond offering, Standard & Poor’s (S&P) Global Ratings upgraded its rating on Galveston Wharves revenue bonds from A minus to A, citing increased revenues from cruise activities and associated parking investments. S&P's report reflects a stable outlook, indicating confidence in the port's ability to sustain revenue growth and maintain an improved financial risk profile. Additionally, Fitch Ratings has upgraded its outlook for port revenue bonds from stable to positive, maintaining an A minus rating.
Construction has commenced on converting an existing cargo warehouse into a 165,000-square-foot cruise terminal. The US$96 million project includes marine work on the pier, two passenger boarding bridges, and ground transportation areas. Additionally, a US$55 million parking garage accommodating ~1,700 cars will be constructed. The estimated US$151 million project will be funded through port cash reserves and revenue bonds.
The new cruise terminal, scheduled to open in November 2025, will homeport the MSC Seascape ship. The Galveston Wharves and MSC finalized an operating agreement for the complex in early 2024. This 20-year agreement, with four 5-year extension options, ensures a set cruise schedule for MSC beginning in late 2025, with potential for the port to negotiate terminal use with other cruise lines based on availability.