Alabama Port Authority upgraded to A by S&P

The Alabama Port Authority was upgraded to A from A-minus by S&P Global Ratings, citing improved financial metrics and the port's importance to the regional economy.

The agency also changed the outlook to positive from stable.

"We are committed to fiscal responsibility while also making the strategic investments that will position the Port of Mobile and the state for future economic success," said Doug Otto, Alabama Port Authority director and CEO. "It is gratifying to see that commitment recognized in this credit rating upgrade."

S&P said, "We believe the authority benefits from a robust demand base composed primarily of the state of Alabama, with additional demand from import-export activity associated with firms and customers in the surrounding states."

The authority's debt service coverage improved to above three times in fiscal 2025. The authority has maintained debt to earnings before interest, dividends and amortization below five times for the past four fiscal years. S&P said it expects these metrics to be maintained over the coming years.

Fiscal 2026 year-to-date net revenues available for debt service as of April 2026 were about $25 million over budget and $23 million over revenues for the same period of fiscal 2025, S&P said.

S&P said the port benefits from its large size and limited competition from other Gulf Coast ports. It also enjoys very strong management and governance, with a team willing to adjust revenue, expenses, and capital spending when needed to maintain financial margins.

S&P notes the port has volatility in its activity levels, which it expects to continue. "We believe these risks are partly mitigated by long-term contracts and minimum annual guarantees with the port's largest customers, which provides some predictability for Alabama Port Authority's revenues."

The authority primarily operates the Port of Mobile.

Concerns remain about how tariffs will affect international trade.

While the port is exposed to heightened physical risks related to flooding, hurricanes, and sea level rise, it has considered climate resiliency as a design factor in its infrastructure investments, S&P said.

The port authority had $295 million in revenue bonds outstanding as of April 30, S&P said. It has a five-year capital improvement plan for 2026 to 2030 of $735 million, which will be funded through a variety of sources.

Fitch Ratings rates the port authority's revenue bonds BBB-plus. Fitch improved the outlook to positive from stable in August, citing strong debt service coverage and modest leverage levels.