Fitch Upgrades Alabama Port Authority Bonds To A-

Fitch Ratings has upgraded the Alabama Port Authority’s docks facilities revenue bonds from BBB+ to A-, with a stable outlook, citing strong debt service coverage, moderate leverage, disciplined capital planning and an increasingly diversified revenue base.

The rating action applies to approximately $221.6 million in outstanding docks facilities revenue bonds. The authority also has about $93.9 million in additional parity debt that is not rated by Fitch.

The upgrade follows S&P Global Ratings’ decision in June to raise the Alabama Port Authority’s issuer credit rating to A. Both rating agencies pointed to the authority’s financial performance, capital investments and ability to maintain a strong financial position while expanding facilities at the Port of Mobile.

“This recognition reflects the thoughtful approach our leadership team and board have taken to growing the port,” Alabama Port Authority Director and CEO Doug Otto said. “We’re continuing to invest in modern facilities and infrastructure while maintaining a strong financial foundation. That puts us in a position to better serve our customers and continue driving economic development across Alabama.”

Strong Debt Service

The stable outlook reflects Fitch’s expectation that the authority will maintain strong coverage and moderate leverage as it completes a substantial capital improvement program. The agency said the port’s current financial position provides sufficient flexibility to carry out planned projects without significantly increasing its debt burden.

The capital program is concentrated primarily in 2026 and 2027 and is expected to be funded largely through federal and state support, grants and internally generated cash. No additional borrowing is currently planned.

Channel Deepening

Major investments include the recently completed deepening and widening of the Mobile Harbor federal navigation channel. The project deepened the channel to 50 feet, allowing larger vessels to call the port with heavier loads and fewer operating restrictions.

The channel improvements are expected to strengthen the Port of Mobile’s position in Gulf Coast container, steel, coal and other bulk cargo trades. They also support continued development at the authority’s container terminal and related intermodal facilities.

The authority is continuing to expand container-handling capacity and improve rail connections serving the terminal. Those investments are intended to increase throughput, reduce cargo transfer times and improve access to inland markets.

Additional projects include improvements to the McDuffie Coal Terminal and other facilities used to handle bulk and breakbulk cargoes. Fitch said the investments should improve operating efficiency and position the port for long-term cargo growth.

Diversification

While the authority’s cargo and revenue base remains concentrated in commodity-related business, particularly metallurgical coal and steel, Fitch noted that container operations and other growing business lines are providing greater diversification.

Fitch also noted that a growing portion of the authority’s revenue is supported by fixed payments and contractual arrangements, providing greater stability than revenue based solely on cargo volumes.

The Port of Mobile handled more than 58 million tons of cargo during fiscal year 2025, according to information cited in Fitch’s analysis. The port serves a range of container, coal, steel, forest products, automotive, chemical and bulk commodity customers.

The authority also operates inland intermodal facilities intended to extend the port’s reach into manufacturing and distribution markets. Those assets form part of a broader strategy to connect Alabama industries with domestic and international transportation networks.

The rating agency said an upgrade beyond the current A- level would likely require the authority to sustain stronger financial metrics while further reducing its reliance on commodity cargoes. Conversely, downward pressure could result from a sustained decline in cargo activity, weaker debt service coverage or a significant increase in borrowing.

The Alabama Port Authority, located on the central Gulf Coast, operates the Port of Mobile and a growing network of inland multimodal transportation assets. According to the authority, port-related activity supports one in seven jobs in Alabama and has generated more than $415 billion in statewide economic impact since 2019.