Fitch Upgrades Port of Galveston Bonds on Cruise Growth

Fitch Ratings has upgraded the Port of Galveston’s outstanding revenue bonds to A+ from A, citing sustained cruise growth and financial metrics consistent with the higher grade. The port issued approximately $198.5 million in bonds in 2024 to finance construction of its fourth cruise terminal.

An A+ rating denotes high credit quality and a low expectation of default risk on Fitch’s investment-grade scale.

“The upgrade directly benefits the port by helping us lower borrowing costs,” said Rodger Rees, port director and CEO of Galveston Wharves.

Cruise volume supports higher rating

Fitch expects completed and ongoing cruise and cargo investments to support long-term revenue growth.

The port handled about 1.49 million cruise passengers and 354 ship calls in 2023. By Dec. 6, 2024, passenger traffic had reached 1.5 million, surpassing the previous annual record, and Galveston expected to finish the year with more than 1.6 million passengers. Its 2025 forecast called for 1.75 million passengers and more than 400 sailings.

Fitch described Galveston as the Gulf of Mexico’s largest cruise port. The agency also identified the port’s dependence on cruise traffic and tourism as an exposure to economic cycles.

Cruise line operating agreements provide some protection against that volatility through minimum annual guarantees, according to Fitch.

Capital spending extends beyond cruise facilities

Galveston has also used operating reserves for infrastructure work. Those projects include a $106 million cargo complex expansion, an internal roadway and other port improvements.

Rees said the independent evaluation supported the port’s plans to reinvest revenue in infrastructure serving its cruise, cargo and commercial operations.

The port has identified a fifth cruise terminal as one of its planned long-term growth projects.

See cruises departing Galveston on Cruise Lookup.