Port Newark Container Terminal has closed on a secured $298 million tax-exempt bond issue as it plans the expansion and improvement of its terminal yard and construction of a new gate facility as well as an upgrade and expansion of its shipping berths at its single terminal.
The project will expand the terminal by 17 percent to 309 acres, and increase its capacity to 1.3 million container lifts. Proceeds of the bond sale will be used to refinance existing debt and its future terminal development project. The bonds were given a Ba1 rating from Moody’s Investment Services. The 30-year bonds have a yield of 4.35 percent, and a spread to Treasuries of 205 basis points.
According to a Moody’s report, PNCT faces some volume risk which is mitigated in large part by the overall financial strength of the New York/New Jersey Port Market. The marine shipping operator also faces construction and execution risk as it completes the expansion.
The expansion should “increase operating efficiency and throughout capacity and satisfy an expenditure threshold required to extend the facility lease to 2050,” according to the report.