Standard & Poor's has revised the outlook on MC Shipping Inc. to negative from stable. At the same time, the company's single-'B' long-term corporate credit rating and single-'B'-minus senior unsecured debt rating were affirmed. The rating on MC Shipping reflects the shipping industry's below-average characteristics, and the company's weak financial profile.
MC Shipping is part of the Vlasov Group-a major ship-owning and ship-management group. Weak fundamentals and high industry-risk characterize the shipping market in general. To a large extent, MC Shipping is exposed to freight-rate volatility, as only a few of its vessels are on medium- to long-term charter. The current depressed container and small gas carrier markets
are having a particularly strong negative effect on MC Shipping.
MC Shipping's constrained financial flexibility reflects the company's current weak cash flow and a shrinking unrestricted cash balance. The ratings might be lowered if market conditions do not improve in the next few months, Standard & Poor's said.