Refinance debt and upgrade facilities
The Los Angeles Harbor Department, which runs the busiest container port in the U.S., is selling about $340 million of debt, the most since 2009, after the risk of a crippling strike was reduced by a tentative agreement on health-care costs between longshoremen and shippers.
The sale this week will help refinance debt and upgrade facilities at the Port of Los Angeles, according to bond documents.
The provisional health-care deal between the International Longshore and Warehouse Union, representing 20,000 dockworkers, and shippers in the Pacific Maritime Association was announced in a joint statement Aug. 26. Negotiations continue on a new contract covering 29 ports in California, Oregon and Washington.
While the Port of Los Angeles isn’t a party to the talks, the development is welcome, said Karl Pan, chief financial officer of the harbor department.
“Anytime you eliminate any uncertainty that might in some people’s mind create some sort of risk, that’s good,” he said by telephone. “I would hope for those that are concerned about the labor negotiations that this helps them reach a positive conclusion.”
A strike shuttering West Coast ports for 10 days would put 169,000 people out of work and drain the U.S. economy of $2.1 billion a day, according to a June report by the National Association of Manufacturers and the National Retail Federation.