Moody’s downgraded CMA CGM a day after Standard & Poors lowered its credit rating for the French ocean container carrier, but the credit agency said the world’s third largest container shipping line has a strong business profile.
The rating agency downgraded the corporate family and probability of default ratings of CMA CGM to B1 from Ba3. It also downgraded the company’s $455 million and $475 million senior unsecured notes, maturing in 2019 and 2017 respectively, to B3 from B2. “ The outlook is negative,” Moody’s said.
“The rating action was triggered by the combined effect of several negative factors that have emerged during recent months and which are not only currently affecting CMA CGM’s credit profile, but may also have prolonged negative implications,” said Marco Vetulli, Moody’s lead analyst for CMA CGM.
CMA CGM’s second quarter performance fell “materially” below Moody’s expectations despite growth in volumes and revenues.
“CMA CGM’s lackluster performance in recent months was due to intense competition between market players which limited the company’s capability to recover the increase in bunker costs incurred by container shipping operators during the second quarter,” Vetulli said.
At the same time, the carrier has a strong business profile with solid market shares globally as well as a distinctive position in certain trade lanes that are more profitable, he said.
CMA CGM also successfully completed the strengthening of its capital base and sold certain assets, which have also boosted its liquidity while no major new deliveries are scheduled before the end of 2012.
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