Toronto – S&P Global Ratings announced it has revised the outlook to stable from negative and affirmed its ‘AA’ long-term issuer credit and senior unsecured issue-level ratings on Montreal Port Authority (MPA). MPA’s total debt outstanding was about C$195 million at year-end 2025.
The rating reflects the authority’s strong enterprise risk profile and its ability to manage debt after securing a low-cost C$1.16 billion loan from the Canada Infrastructure Bank (CIB) to fund construction of a new container terminal at Contrecœur, a project of national interest.
The stable outlook stems from S&P Global Ratings’ view that strength in the authority’s enterprise risk profile will support revenue generation in the next two years, as it begins construction of the new container terminal. “Despite projected escalation in the authority’s debt burden to more than 10x EBIDA outside of our two-year outlook horizon, we believe the financing terms of the new subordinated debt facility will ensure sustained robust debt service coverage (DSC) of senior obligations and continued investment in the port’s assets. We also expect that the preservation of financial flexibility as part of this financing arrangement will enhance the authority’s cash position.”
The credit rating agency continued: “We could take a negative rating action in the next two years if sustained weaker operations and material cost overruns in the Contrecœur terminal project, absent a meaningful response by the management, resulted in higher-than-expected borrowings and overall weakening of the financial risk profile beyond what we currently assume.
“We believe a positive rating action is unlikely during the outlook horizon due to the authority’s large capital program and related debt issuance. We could raise the rating if the government increases the strength or durability of its relationship with Canadian port authorities (CPAs) through revised regulation that leads to significantly more oversight. This could result in us revising the link between the federal government and MPA to very strong, leading to an upgrade.
“The outlook revision to stable reflects our view that the financing arrangement with the CIB, a Crown Corporation of the Government of Canada that is responsible for investing in infrastructure, allows the port authority to undertake construction of a new container terminal while maintaining very high DSC of its senior obligations through to maturity of the CIB credit facility. The Contrecœur terminal development, a new 1.15 million, 20-foot-equivalent-unit, two-berth container terminal, is the authority’s largest capital undertaking in the next five years. Although we expect MPA’s debt burden will increase with the inclusion of this obligation, this arrangement will also benefit its liquidity position, enabling generation of excess cash for other strategic investments in port facilities.”
Port well positioned to boost Canadian ocean trade
The report further states: “Despite ongoing uncertainty surrounding trade relations with the U.S. and a high degree of unpredictability around the duration and scale of the Middle East war and its potential effect on commodity prices, supply chains, economies, and credit conditions, we believe the port plays a crucial role in national trade and is well positioned to benefit from increasing trade with its core markets in Europe and the Mediterranean in the long term.”
Port of Montreal welcomes report
Nathalie Pilon, Chair of the MPA Board of Directors, welcomed the revised credit report, declaring: “Upgrading the outlook on our excellent AA credit rating by Standard & Poor’s, the world’s largest rating agency, reflects the rigorous financial discipline we have implemented as well as the strength of our business model.
“It also underscores our ability to successfully carry out transformative projects, such as the one in Contrecoeur, while ensuring responsible and sustainable management of our resources.”
(Port of Montreal photo)