Sea Point container project receives La. bond approval

The Louisiana State Bond Commission this month gave conditional approval to Sea Point LLC to issue $300 million in tax-free bonds to help finance a ship-to-barge transshipment terminal in the Lower Mississippi River.

Sea Point founder Jim Amoss, a former chief of Lykes Lines, plans to start construction on the mid-river container terminal later this year if other investors commit to the project. The business plan is to use barge rainsto move containers upriver to the Port of New Orleans, where they can connect to highways and six Class I railroads, so oceangoing vessels don't have to make the 100-mile trek to the city.

The Gulf Opportunity Zone Act, or Go Zone, bonds were created by the federal government to help Louisiana rebuild from Hurricane Katrina. The legislation allows the state to issue $7.9 billion in tax-exempt private activity bonds allowing qualified businesses to borrow money at low interest rates. Interest earnings are also not subject to the Alternative Minimum Tax, meaning the interest rate will be much lower than private businesses can obtain on their own, and investors will receive much better yields.

Amoss told American Shipper he expects the Go Zone bond to lower the interest rate by 1.5 percent. A bondholder who normally would pay 7 percent interest, for example, could now invest at 5.5 percent.

It offers us the most attractive financing for the debt portion of the project, Amoss said. About three-quarters of the project would be covered by debt and the rest through equity.

A Bond Commission staff person said authorization for the bonds was not final until the agency receives and reviews a letter of recommendation from the Louisiana Department of Economic Development and other supporting documentation.

More information about the Sea Point project and other container terminal developments in Louisiana is available in the May American Shipper, pages 62-75. 

Source: American Shipper