Please ensure Javascript is enabled for purposes of website accessibility

Port of Miami Sells $1.4 Billion in Municipal Bonds

By The Daily Upside – Aug 10, 2021 at 8:00PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

You've heard of Miami Vice, but how about a Miami slice...of the city's port debt. On Tuesday, Miami-Dade County announced the sale of $1.4...

For more crisp and insightful business and economic news, subscribe to The Daily Upside newsletter. It's completely free and we guarantee you'll learn something new every day.

You've heard of Miami Vice, but how about a Miami slice...of the city's port debt.

On Tuesday, Miami-Dade County announced the sale of $1.4 billion in bonds backed by revenue from the Port Of Miami. The offering is designed to entice investors seeking local government debt linked with industries tightly anchored to the U.S. economic recovery, like cargo and cruises.

Easy Come, Easy Cargo

While the pop culture mythology surrounding Florida's largest port — from 2 Fast 2 Furious to Cocaine Cowboys — skews toward the illicit, the real story is about legitimate business. Some $45 billion in cargo was processed at the colloquially known "PortMiami" in the 2020 fiscal year, and in non-pandemic times, the port welcomes over 20% of the world's cruise ship traffic.

Fundamentals like that are why investors see a boatload of long-term appeal:

  • Cargo revenues at the port climbed more than 20% to $29 million last year. And scorching demand for goods during the pandemic has put the port's cargo volume on track to hit a record 1.25 million 20-foot-equivalent units this year (think of each unit as a large shipping container).
  • While cruise revenues sank 35% to $34 million between fiscal years 2019 and 2020, the federal government chipped in $66 million to tide the industry over as it recovers. And Moody's raised the Port of Miami's credit outlook to stable recently, citing expectations that passenger volumes are due for a revival.

"The market is pretty receptive to giving some relief as long as there's a faith things will return to normal," Howard Cure of Evercore Wealth Management told The Wall Street Journal. As for its new bond sale, the Port of Miami plans to put the proceeds toward refinancing its $1.6 billion in outstanding debt.

Don't Short Ports: Bonds backed by ports have been a prudent investment this year: the S&P municipal-bond port index has returned over 2.4% to investors, outshining the 1.9% return on municipal bonds and demolishing the measly 0.2% return on investment-grade U.S. corporate bonds.

None

Invest Smarter with The Motley Fool

Join Nearly 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
349%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/01/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.