Moody’s Investors Service upgraded CMA CGM’s corporate rating to B2 from B3, citing the French ocean carrier’s return to a more stable operating and financial profile.
CMA CGM’s liquidity position was strengthened by the $528 million sale of a 49 percent stake in its container terminal unit, Terminal Link, to China Merchants International, and a $150 million equity injection by the French sovereign fund Fonds Strategique d’Investissement, the ratings agency said.
These transactions have enabled CMA CGM to “significantly improve its financial flexibility and hence its credit profile.”
CMA CGM is one of the most efficient container shipping companies “because of its ongoing and successful efforts to improve its cost structure,” Moody’s said.
The ratings agency also upgraded to Caa1 from Caa2 CMA CGM’s 325 million euros and $475 million of senior unsecured notes maturing in 2019 and 2017 respectively. The outlook on the ratings is stable.
Moody’s said it expects CMA CGM will maintain a consolidated financial profile commensurate with a B2 rating on a sustainable basis, even if freight rates remain low over the next 12-18 months as a result of oversupply.