Port of Seattle

Port of Seattle — Financial Profile

Port of Seattle (Marine Operations)

Pacific Northwest Gateway — Combined Aviation-Marine Revenue Bond

Disclaimer: This article is AI-generated for informational purposes only and does not constitute legal, financial, or investment advice. DWU Consulting does not provide legal or tax counsel. Readers should consult qualified professionals before making financial decisions. All data sourced from public documents, DWU Consulting [February 2026] survey, and official Port of Seattle filings.

2026-02-23 — Initial publication: Port of Seattle marine operations profile with FY2024 $1B+ revenue milestone, NWSA partnership structure, and Terminal 5 completion data.

Introduction

The Port of Seattle stands as the Pacific Northwest's primary multi-modal transportation authority, operating both Seattle-Tacoma International Airport (Sea-Tac) and the region's principal container cargo and cruise facilities. A remarkable and unusual feature of Port of Seattle's capital structure: a single municipal corporation issues combined aviation-marine revenue bonds, with all bonded debt secured by the aggregate gross revenues of both business segments.

For bond investors, this combination creates a diversified but aviation-dominant revenue base (84% aviation, 16% maritime). Critically, the Port's marine operations are delivered through the Northwest Seaport Alliance (NWSA)—a 50/50 partnership with the Port of Tacoma. Understanding NWSA's governance, revenue sharing, and capital decision-making is essential to assessing Port of Seattle credit quality.

FY 2024 marked a milestone: the Port crossed $1 billion in operating revenues for the first time, driven by strong Sea-Tac aviation demand, record NWSA container throughput (3.34M TEUs), and growing cruise passenger volumes (1.75M). The Port projects FY 2025 revenue at $1.1 billion (+9.4%), underpinned by continued demand for West Coast container gateway capacity and Alaska cruise homeport services.

Entity Overview

Port of Seattle (Legal Entity: Port of Seattle, Washington)

Attribute	Detail
Legal Name	Port of Seattle
Entity Code	SEA-P
State	Washington
Structure	Municipal corporation / port district (King County); statutory authority to issue combined aviation + marine revenue bonds
Governance	5 Commissioners elected at-large by King County voters (4-year terms, staggered)
Executive Director	Stephen P. Metruck
Fiscal Year End	December 31
Marine Partnership	Northwest Seaport Alliance (NWSA) — 50/50 partnership with Port of Tacoma; does NOT issue bonds; Port of Seattle issues combined debt

Northwest Seaport Alliance (NWSA) — The Partnership Model

The Northwest Seaport Alliance is a Port Development Authority (PDA) created under Washington State law as a partnership between Port of Seattle and Port of Tacoma. For bond investors, NWSA is critical infrastructure but not a direct bonded entity. All NWSA marine terminals issue debt through the Port of Seattle's combined revenue bond structure.

NWSA Structure & Governance:

• Formation: Perpetual partnership; each partner contributes facilities and retains 50% equity ownership
• Board Composition: 5-member board (2 from Port of Seattle, 2 from Port of Tacoma, 1 neutral chair)
• Executive Leadership: Executive Director oversees combined container and cruise operations
• Revenue Sharing: NWSA distributes 50% of net operating income to each home port based on container throughput and cargo origin/destination
• Capital Decisions: Projects exceeding $100 million require board approval from both ports (de facto veto power to either partner)
• Facilities Operated: Terminal 5 (Seattle), Terminal 18 (Seattle), Husky Terminal (Tacoma), Washington United Terminal (Tacoma), Pierce County Terminal (Tacoma)

Why NWSA Matters for Credit Analysis:

NWSA allows Port of Seattle and Port of Tacoma to operate a unified container gateway with coordinated vessel scheduling, shared labor agreements, and unified marketing. This integration produces scale benefits: combined 3.34 million TEU throughput (2024) positions the Seattle-Tacoma gateway as the third-largest container port on the U.S. West Coast. However, the 50/50 revenue split means Port of Seattle captures only 50% of NWSA net operating income — the Port does not control the full marine upside. Moreover, major capital decisions (e.g., terminal expansions >$100M) require unanimous agreement, introducing governance risk.

Critically: NWSA itself does NOT issue bonds. All Port of Seattle marine debt is issued by the Port itself, backed by available revenues from the combined Port (aviation + marine). This structure means bond investors are analyzing the creditworthiness of Port of Seattle's total revenue stream, not NWSA's standalone credit.

Financial Summary

Recent Operating Performance:

Metric	FY 2024	FY 2025 Budget
Total Operating Revenue	$1.0 billion	$1.1 billion
Operating Expenses	~$620 million	$678.3 million
Operating Income	~$380 million	~$421.7 million
Total Outstanding Debt	~$4.2 billion	~$4.2–4.5 billion
Debt Type	First Lien + Intermediate Lien Revenue Bonds	First Lien + Intermediate Lien Revenue Bonds

Revenue Mix (FY 2024):

• Aviation (~84%): Sea-Tac landing fees, terminal rents, concessions, parking, cargo handling — primary revenue generator
• NWSA Container Operations (~12%): 50% share of NWSA net operating income from container throughput (3.34M TEUs, 2024)
• Cruise Operations (~2%): Terminal fees, dockage from ~1.75 million cruise passengers
• Non-Containerized Cargo, Real Estate, Marina & Fishing Leases (~2%): Breakbulk, grain, fishermen's terminal, commercial property

NWSA Operational Performance (Calendar Year 2024):

• Container Throughput: 3.34 million TEUs (+12.3% YoY) — combined Seattle + Tacoma
• Full Container Imports: +20% YoY
• Full Container Exports: +8% YoY
• Cruise Passengers: ~1.75 million across ~275 vessel calls
• Annual Trade Value: $73 billion (containers, cargo, cruise)
• Individual Seattle/Tacoma Breakdown: Not separately reported; Port of Seattle receives 50% of NWSA net operating income (allocated by throughput contribution)

Bond Structure & Ratings

Port of Seattle employs a two-tier lien structure for its revenue bonds, with First Lien and Intermediate Lien series. Both are secured by available revenues (gross revenues minus operating expenses) from ALL Port operations—aviation, NWSA marine, and other non-aviation sources.

Pledge & Covenants:

• Security: Available revenues (defined as gross operating revenues less operating expenses) from all Port sources, combined
• First Lien Rate Covenant: 1.35x debt service coverage ratio on First Lien debt service
• Intermediate Lien Rate Covenant: 1.10x debt service coverage ratio on First Lien + Intermediate Lien debt service
• Tax Authority: Limited tax GO from King County (0.25% of taxable assessed value without voter approval; up to 0.75% with 60% voter approval)

Recent Issuances & Ratings:

Series / Tranche	Amount	Year	Moody's	S&P	Fitch
First Lien (General)	~$2.1B outstanding	Multiple	Aa2	AA	—
Intermediate Lien 2024	$817.9M	2024	A1	AA-	AA-
Intermediate Lien 2025	$761.1M	2025	A1	AA-	AA-

All ratings: Stable outlook.

The two-tier structure protects First Lien holders (higher in the waterfall) with a 1.35x coverage requirement, while Intermediate Lien holders accept slightly lower security (1.10x combined coverage). Both rating levels reflect high credit quality: Port of Seattle's diversified revenue base, strong aviation fundamentals at Sea-Tac, and NWSA's scale in container handling.

Capital Program & Infrastructure Investment

Port of Seattle maintains an aggressive 5-year capital improvement program reflecting its strategic role as Pacific Northwest gateway and ongoing modernization needs.

5-Year Maritime Capital Program (2026–2030):

• Total Maritime CIP: $737 million (avg. $147.4M per year)
• Total Port CIP (Aviation + Maritime): $4.4 billion (includes Sea-Tac airport improvements)

Major Projects:

• Terminal 5 Modernization: $500M+ capital investment (NWSA joint project) — Completed 2024 with final commissioning. First installation of shore power in NWSA alliance; positions for mega-ship (18,000+ TEU) operations; enhances environmental compliance
• Fourth Cruise Berth: ~$200 million total ($100M Port contribution + $100M private sector funding) — Planned; will expand cruise capacity and homeport services for Alaska market
• Container Yard Expansion & Automation: Incremental improvements to enhance throughput and reduce vessel wait times
• Environmental & Resilience: Sea-level rise adaptation, stormwater management, electrical grid upgrades

The capital program is sized to support continued growth in container volumes (target: 3.5M+ TEUs by 2030) and cruise homeport expansion. Terminal 5's completion in 2024 was a major milestone, positioning NWSA to serve the latest generation of post-Panamax and ultra-large container ships without additional greenfield development.

Competitive Position & Market Dynamics

Pacific Northwest Container Gateway:

With 3.34 million TEUs (2024), the Seattle-Tacoma gateway ranks third on the U.S. West Coast, behind Los Angeles-Long Beach and Oakland. However, the NWSA gateway is increasingly competitive for Asia-Pacific trade:

• All-Water Services: Shorter transit times to East Asian ports (Shanghai, Hong Kong) than California ports — growing advantage as supply chain diversification accelerates
• Rail Connectivity: BNSF and UP direct intermodal access; strong domestic container flow to Chicago, East Coast distribution
• Labor Relations: ILWU union leadership; historically stable labor agreements (though 2024 national negotiations created temporary uncertainty)
• Environmental Leadership: Terminal 5 shore power, electric cargo handling equipment; growing appeal to shippers prioritizing ESG compliance

Alaska Cruise Market:

Port of Seattle is the largest Alaska cruise homeport in North America. 1.75 million cruise passengers (2024) generate stable revenue through terminal fees, dockage, and concessions. Growing Alaska cruise demand (+8–15% annually) provides growth vector.

Air Cargo at Sea-Tac:

Sea-Tac's role as a major Pacific Northwest air hub (Alaska Airlines headquarters) supports strong cargo volumes, particularly Asia-Pacific air freight. Post-pandemic normalization has stabilized air cargo demand at elevated levels.

Credit Analysis: Strengths & Considerations

Credit Strengths:

1. Diversified Combined Revenue Base: Aviation dominance (84%) combined with maritime (16%) reduces reliance on single sector; Port is buffered if one segment weakens
2. Sea-Tac Airport Resilience: Pacific Northwest's primary air hub; strong regional economy (tech, aerospace, agriculture exports) drives consistent aviation demand
3. NWSA Scale & Market Position: 3.34M TEUs (2024, +12.3% YoY) reflects growing West Coast preference for all-water Asia-Pacific routing; major capex completed (Terminal 5) provides multi-decade runway
4. Strong Lien Ratings: First Lien (Aa2/AA) commands investor confidence; two-tier structure attracts broad investor base
5. Revenue Momentum: FY2024 $1B+ milestone and FY2025 +9.4% budget growth driven by genuine operational gains, not one-time events
6. Alaska Cruise Growth: 1.75M passengers with strong future demand (rising middle class in Asia drives Alaska tourism)
7. Limited Tax GO Authority: King County property tax backing (up to 0.75% with voter approval) provides safety net

Credit Considerations:

1. Maritime Revenue Concentration Risk: While 16% of total revenue, NWSA generates 50% of port net income — if trans-Pacific container volumes weaken, material revenue impact
2. NWSA Governance Constraints: 50/50 partnership with Port of Tacoma; capital projects >$100M require both ports' consent; no unilateral control over NWSA strategic decisions or capital allocation
3. Asia-Pacific Trade Dependency: Container volumes reflect China-U.S. trade flows; tariff escalation, trade wars, or onshoring would pressure throughput and rates
4. Large Outstanding Debt Base: ~$4.2B debt (~4.2x operating income) is substantial; debt service consumes ~25–30% of operating income, limiting financial flexibility
5. Capital-Intensive Operations: $4.4B 5-year CIP requires continuous refinancing; future rate increases needed if debt issuance accelerates
6. Seismic & Weather Risk: Pacific Northwest location (Cascadia subduction zone, earthquakes, winter storms); property damage or operational disruption could impact revenue
7. Labor Cost Escalation: ILWU labor agreements; recent contract terms (2024) locked in wage/benefit increases; ongoing wage pressure narrows operating margins

Related Articles

• Port Revenue Bonds and Finance — Overview of port debt structures, security pledges, and bond rating frameworks
• Container Port Economics — TEU volumes, throughput metrics, labor, operating costs, and profitability models
• Port Intermodal Connectivity & Rail Networks — BNSF/UP access, rail rates, domestic distribution economics
• Port Capital Programs & Infrastructure Investment — Terminal modernization, automation, environmental capex, funding strategies
• Port Environmental Mandates & Green Bonds — Clean air regulations, shore power, emissions targets, green financing