Rating Action: Moody’s revises Stockton Port District’s (CA) outlook to positive from stable; affirms A3 rating

New York, September 07, 2023 — Moody’s Investors Service has today affirmed the A3 rating of Stockton Port District, CA’s (“Port of Stockton” or “district”) approximately $20 million of senior revenue bonds and changed the outlook to positive from stable.


Today’s rating action reflects the Port of Stockton’s very low leverage and consistent revenue growth that has led to strong debt service coverage levels despite the port’s throughput volatility. Over the last three fiscal years (2020-2022), the port has an average debt service coverage of 4.26x and debt to operating revenue of 0.66x. This low leverage provides strong flexibility to manage throughput volatility, and this risk is further mitigated by the port’s fixed rental property payments that comprise approximately half of the port’s operating revenue. While the district’s days cash on hand at around 300 days is relatively moderate compared to peers, the district currently maintains cash to debt levels that are well over 100%, and at the end of fiscal 2023 had approximately $40 million of available cash on hand relative to annual debt service of just under $4 million. As a result, we expect the port to be able to manage any increases in leverage, including a planned borrowing of around $40 million during fiscal 2024. While financial metrics will undoubtedly decrease given the incremental debt, leverage will continue to remain low as we expect the port to maintain strong financial metrics with debt coverage levels still over 3.0x, debt to operating revenue of just under 1.0x, while  maintaining strong cash levels relative to annual debt service and total indebtedness.


The positive outlook reflects our expectations that the district will be able to manage its business including plans for additional debt while maintaining strong financial performance. The positive outlook also reflects the continued strength in financial metrics and steadily growing revenue, supported by economic expansion and new revenue generating property along with stable property management revenue.


  • Continued growth in operations and revenues
  • Ongoing diversification and expansion of operations
  • Sustained strong liquidity levels relative to leverage


  • Deterioration in debt service coverage levels below 2.0x
  • Significant declines in cargo shipments or the loss of major tenants or shipping partner –     Sizeable deteriorations of available liquidity


Outstanding bonds are limited obligations of the district and are secured by the district’s net revenue pledge. The rate covenant for the bonds is 1.2 times with a relatively strong additional bonds test of 1.4 times debt service on all debt. The reserve requirement is the lesser of (a) the Maximum Annual Debt Service or (b) ten percent (10%) of the initial offering price, and is funded with a surety.


Port of Stockton is a deep-water seaport located seventy-five miles inland from San Francisco, in the agricultural heartland of the San Joaquin Valley. The district owns and operates facilities that are used to load and unload cargo from ships, trucks and railroads and for storage. Cargos handled by the district include a diverse array of dry and liquid bulk commodities including coal, steel products, cement, fertilizers, ammonia, sulfur, rice and molasses. The district also leases land and warehousing facilities to a number of diverse tenants. The district consistently ranks as the fourth largest port in the State of California after Oakland, Los Angeles and Long Beach. Port of Stockton represents an important economic engine for the region, with around 10,077 direct and indirect jobs stemming from its operations.


The principal methodology used in this rating was Publicly Managed Ports published in March 2023 and available at Alternatively, please see the Rating Methodologies page on for a copy of this methodology.


For further specification of Moody’s key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody’s Rating Symbols and Definitions can be found on

For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody’s rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider’s credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the issuer/deal page for the respective issuer on

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Rodney Cannon

Lead Analyst

Project Finance

Moody’s Investors Service, Inc.

7 World Trade Center

250 Greenwich Street

New York 10007

JOURNALISTS: 1 212 553 0376

Client Service: 1 212 553 1653

Angelo Sabatelle

Additional Contact

Project Finance

JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653

Releasing Office:

Moody’s Investors Service, Inc.

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JOURNALISTS: 1 212 553 0376

Client Service: 1 212 553 1653