Moody’s Downgrades CMA CGM Debt Again

Moody’s downgraded some $920 million of CMA CGM’s debt for the second time in three months on Friday, citing the ocean carrier’s weak third quarter performance.

Moody’s cut the container ship operator’s corporate family rating and probability of default rating to B2 from B1. The ratings agency also downgraded CMA CGM’s $445 million and $475 million senior unsecured notes maturing in 2017 and 2019 respectively, to Caa1 from B3.

The “outlook is negative,” Moody’s said, a day after CMA CGM announced a third quarter net loss of $224 million. “As a result 2011 will be significantly weaker than estimated by Moody’s last September translating into credit metrics that are likely to be very weak … at year end,” said Marco Vetulli, Moody’s lead analyst for CMA CGM.

Moody’s downgraded CMA CGM on Sept. 6 because second quarter results fell “materially” below the rating agency’s expectations despite higher revenues and container volumes.

Moody’s acknowledged the Marseille-based carrier has a strong business profile with solid market shares globally, as well as a distinctive position in some secondary trades that are more profitable.

The world’s third largest container ship carrier also successfully strengthened its capital based early in 2011 and has recently sold some assets.

“This in particular boosted its liquidity. Moreover, all the major new deliveries of ships that are scheduled before end of 2012 are fully financed,” Vetulli said.

-- Contact Bruce Barnard at brucebarnard47@hotmail.com.