DATE: Saturday, April 26, 1997              TAG: 9704260304

SECTION: LOCAL                   PAGE: D2   EDITION: FINAL 

SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER 

                                            LENGTH:   41 lines

PORT'S BONDS EARN A SOLID S&P RATING

Standard & Poor's assigned a solid investment grade rating on Friday to $100 million worth of bonds the Virginia Port Authority plans to sell for expansion of the port of Hampton Roads.

The debt ratings agency did raise one concern, however, about the authority's funding. Since direct state support of VPA was ended last year by the General Assembly, the authority ``will be tested to operate financially sound on a stand-alone basis,'' S&P said in a press release.

The port authority itself is comfortable with losing the $8 million to $14 million in state support. It had asked for the independence from the state's general fund.

S&P gave the bonds a single-A rating. The 30-year bonds will be sold in June after being approved by the port authority's board in May.

The rating reflects the port's effective management, its diverse cargo base and the planned funding of capital expenses through both revenues and a segment of the state gas tax dedicated to the Commonwealth Port Fund, S&P said.

In particular, S&P highlighted Hampton Roads' growth, saying ``cargo growth, up over 12 percent annually since 1993, exceeds that of most other East Coast ports.''

The growth can be attributed to easy access from the ocean to the port's modern cargo terminals, competitive cargo handling rates and easy road and rail access to destinations in the Midwest, the ratings agency said.

The port authority plans to spend $400 million during the next decade to expand and improve its marine cargo terminals to handle an anticipated doubling of cargo shipments by 2010. The port handled 9.7 million tons of cargo in 1997.

While the port's capital needs over the next decade are ``sizeable,'' the port authority plans to fund almost half the costs from surplus revenues and the Commonwealth Port Fund, S&P said.

The VPA issued $35.5 million in bonds last year to begin the expansion of Norfolk International Terminals. KEYWORDS: VIRGINIA PORT AUTHORITY BOND RATING

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