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Investors Service News

26 Mar 2021

Suez Canal Blockage Adds Strain to Global Supply Chains

(Photo: Suez Canal Authority)

A stuck container vessel in the Suez Canal, which has blocked the flow of goods through the narrow channel, will add strain to global supply chains already stretched by rebounding economic activity and tight shipping container supplies, analysts said on Friday.The 400-metres long Ever Given container vessel has been stuck in the canal since Tuesday, suspending traffic of containers transporting goods, parts and equipment through the shortest sea link between Europe and Asia.The…

24 Jun 2020

Carnival's Credit Rating Cut to Junk Status by S&P

File photo: Carnival Corp

Ratings agency Standard & Poor’s on Tuesday downgraded bonds of Carnival Corp to junk status, forecasting continued weak demand for the cruise industry hammered by the COVID-19 pandemic.Standard & Poor’s cut its rating on the world’s biggest cruise operator’s secured bonds to ‘BB+’ from ‘BBB-‘, and its unsecured bonds to ‘BB-‘ from ‘BBB-‘. Both are now regarded as non-investment grade or junk bonds.Carnival’s overall issuer credit rating was also lowered to ‘BB-‘ from ‘BBB-‘.

20 Apr 2020

Norwegian Cruise Taps Goldman Sachs to Explore Stake Sale

(Photo: Norwegian Cruise Line)

Norwegian Cruise Line Holdings Ltd has hired investment bank Goldman Sachs Group Inc to explore financing options that could include the sale of a stake in the company, people familiar with the matter said on Friday.Norwegian’s attempt to bolster is finances comes as cruise operators have been forced to suspend their operations due to the novel coronavirus outbreak. They have been left out of a $2.3 trillion stimulus package that U.S. lawmakers have adopted to support the economy…

12 Mar 2019

Moody's Upgrades Panama Canal Rating

Photo credit: ACP

Moody’s Investors Service upgraded the 20-year $450 million Senior Unsecured Bonds issued by the Panama Canal Authority (ACP) to A1 from A2, with a stable outlook, based on the waterway's strong performance since the expansion's inauguration.Moody's noted that the Expanded Canal has increased overall tonnage and attracted new market segments, contributing to the waterway's strong performance. According to Moody's, "stronger cash flow generation coupled with a relatively low leverage…

06 Jan 2019

Moody's Says Global Oil and Gas Heads into 2019 on Steady Footing

The global Oil and natural gas prices will be volatile, but also range-bound in 2019, Moody's Investors Service says in its annual report outlining key credit themes in oil and gas for the year ahead.While the recent announcement that OPEC and Russia will cut production helps alleviate concerns about oversupply, the pivotal questions in the coming year are whether OPEC and Russia will maintain their production discipline and what might happen in June, when the current agreement expires.Moody's expects the medium-term price band for West Texas Intermediate (WTI) crude, the main North American benchmark, to be $50-$70 per barrel (bbl)…

14 Dec 2018

Moody's Rated Panama Canal with Stable Outlook

Moody's Investors Service reaffirmed the Panama Canal Authority's (ACP) A2 long-term rating with a stable outlook, based on its distinctive position as an infrastructure asset with a unique geographic advantage and business model, and its strong historical operational and financial performance.According to Moody's, the ACP's strong financial performance has resulted in better than anticipated financial metrics, driven by the successful operations of the Expanded Panama Canal. The credit rating agency noted the Canal's strong operating track record and robust growth after the Expansion.Factoring into its decision, Moody's cited "the Canal's…

09 Dec 2018

Moody's Downgrades Maersk

Moody's Investors Service has downgraded ratings for AP Moller-Maersk after a review of the Denmark-based shipping and oil company. Moody's expressed concerns about lower economic growth and the US-China trade war."The downgrade reflects our expectation that Maersk will face increased market and execution risks and, as a result, operate at a higher leverage than is commensurate with a Baa2 rating for a company in such a volatile and cyclical business as container shipping," said Maria Maslovsky, Moody's Vice President -- Senior Analyst and the lead analyst for Maersk."However, we acknowledge Maersk's leadership position as a liner and container terminal operator…

29 Jul 2018

Port of Corpus Christi Raises USD 216mln for Ship Channel Expansion

Port of Corpus Christi successfully priced and sold $216.2 million of Senior Lien Revenue Bonds. These bonds will be used for both the deepening and widening of the Corpus Christi Ship Channel as well as upcoming capital projects within the Port.Wells Fargo Securities acted as Lead Manager of a syndicate of underwriters including JP Morgan, Citigroup, and Frost Bank.“We are pleased with the level of interest the institutional investment community demonstrated for both series of our bonds.” said Sean Strawbridge, CEO of the Port of Corpus Christi. “This round of funding will help the Port of Corpus Christi further progress our ambitious…

28 Nov 2017

GoM Stakeholders Energized Despite Lingering Oil Bust

Miss Marilene Tide (Credit Tidewater)

Gulf of Mexico vessel builders – and their customers – adapt to a lean offshore market. After oil prices plunged in late 2014 – pressured by shale output – demand for offshore vessels in the Gulf of Mexico shrank, day rates for boats fell and non-working units were idled. This year, several GoM boat builders filed for Chapter 11, or voluntary bankruptcy, while others consolidated. The most diversified companies kept their heads above water. Today, the outlook's a bit brighter. Crude oil prices hit bottom early last year. Tidewater Inc.

19 Nov 2017

Moody's on Shanghai Port Tariff Cut

Moody's Investors Service says that the announcement by China's National Development and Reform Commission (NDRC) of a cut in the handling tariff for import and export containers is credit negative for Shanghai International Port (Group) Co., Ltd (SIPG), but will not immediately affect SIPG's A1 issuer rating or the A2 backed senior unsecured bond ratings of Shanghai Port Group (BVI) Holding Co., Ltd. The ratings outlook remains stable. "The reduction in tariff will negatively impact SIPG's profitability and cash flow generation capability from 2018 onwards, and reduce the financial headroom for its standalone credit profile," says Osbert Tang, a Moody's Vice President and Senior Analyst, and the Local Market Analyst for SIPG.

18 Oct 2017

Ocean Rig Withdraws Winding Up Petition

Ocean Rig UDW Inc., an international contractor of offshore deepwater drilling services, has announced that pursuant to an order of the Grand Court of the Cayman Islands Simon Appell of AlixPartners Services UK LLP and Eleanor Fisher of Kalo (Cayman) (formerly AlixPartners) have been discharged as joint provisional liquidators of the Company and its subsidiaries. The subsidiariesare Drill Rigs Holdings Inc. (DRH), Drillships Financing Holding Inc. (DFH), and Drillships Ocean Ventures Inc., (DOV) and together with UDW, DRH and DFH, the Scheme Companies. Accordingly, the petitions to wind up the Scheme Companies have been withdrawn. As previously announced by the Company, the schemes of arrangement proposed by the Scheme Companies became fully effective on September 22, 2017.

08 Aug 2017

Cheniere to Completion 4th LNG Unit Soon

Houston-based energy company Cheniere Energy said that it is nearing completion of its fourth liquefied natural gas unit at its massive Sabine Pass terminal in Louisiana near the Texas border. The company, primarily engaged in LNG-related businesses, owns and operates the Sabine Pass LNG terminal in Louisiana. "Our long-term contract with Gas Natural Fenosa commenced and first LNG production occurred from Train 4 at Sabine Pass," said Jack Fusco, Cheniere's President and CEO. "We are revising our 2017 guidance upward as our operating results year-to-date have exceeded our expectations, primarily due to LNG trains entering service ahead of schedule and the ramp-up in LNG production levels occurring faster than we'd forecast earlier this year.

13 Dec 2016

Moody's: Global Shipping Challenged by Oversupply

Moody's outlook for the global shipping industry in 2017 is negative, reflecting continued oversupply and a 7%-10% decline in EBITDA. Dry bulk freight rates will remain low due to subdued demand, though deferred vessel deliveries, cancellations and scrapping will help curb net capacity growth. Airline profitability will weaken slightly in the year ahead, Moody's Investors Service says in its 2017 outlook for the global transportation industry. Aircraft lessors' margins will weaken amid stiff competition, while shipping companies will continue to be challenged by an oversupply of vessels. North American railroad operators will see prices rise as freight volumes stabilize.

25 Oct 2016

Moody's: Ratings of Overseas Shipholding on Review for Downgrade

Moody's Investors Service, has placed the ratings of Overseas Shipholding Group, Inc. (OSG) under review for downgrade, including its B2 corporate family and Caa1 senior unsecured ratings, and the B1 and Ba2 senior secured debt ratings of its subsidiaries, OSG Bulk Ships, Inc. (OBS) and OSG International, Inc. (OIN). The review follows the company's announcement that its Board of Directors has approved the plan to separate its business units into two independent public companies via a spin-off of the international business, OIN. The spin-off is subject to the satisfaction of certain conditions, including regulatory requirements. The current debt at OIN and at OBS will remain with those entities post separation. Moody's also affirmed the SGL-2 speculative grade liquidity rating.

30 Jul 2016

Moody's: Challenges Ahead for Asian Port Operators

Moody's Investors Service says lackluster global growth, weak commodity prices, high capital expenditure commitments and a liner industry struggling with overcapacity is testing the resilience of Asian port operators. "While the rated port operators in Asia have scope for cost cuts and are generally supported by their dominant market position, their resilience is being tested by these challenging operating conditions," says Ray Tay, a Moody's Vice President and Senior Analyst. Moody's conclusions are contained in its just-released report, entitled "Rated Port Operators -- Asia: Challenges on the Rise". The port operators in the region are grappling with slowing or negative growth in cargo volumes due to China's (Aa3 negative) slowdown…

12 Jul 2016

Moody's confirms Teekay's B3 CFR; Changes Outlook to Stable

Moody's Investors Service confirmed the ratings of Teekay Corporation ("Teekay", or "Parent"): Corporate Family Rating ("CFR") at B3 and senior unsecured debt rating at Caa1. Concurrently, Moody's upgraded the Speculative Grade Liquidity rating to SGL-3 (adequate), from SGL-4 (weak). The ratings outlook is stable. This action resolves the review for downgrade initiated on 15 April, 2016. Speculative Grade Liquidity rating, upgraded to SGL-3 from SGL-4. The ratings outlook was changed to Stable from Rating Under Review. The B3 CFR considers the company's adequate liquidity, following the execution of re/financing initiatives as of June 29…

06 May 2016

Moody's Dings Hurtigruten's Outlook Due to Newbuilds

(Photo Courtesy: Hurtigruten AS)

Moody's Investors Service, (Moody's) issued a press release affirming the B2 corporate family rating (CFR), B2-PD probability of default rating, and the B2 senior secured rating of Silk Bidco AS (Hurtigruten), the full owner of Norwegian cruise operator Hurtigruten  ASA. While the ratings have been affirmed, the outlook has been changed to stable from positive. "The change in outlook to stable reflects the higher credit risk and weaker liquidity that Hurtigruten's recent capex spending announcement entails" says Guillaume Leglise, Moody's lead analyst for Hurtigruten.

30 Mar 2016

TRAC Intermodal Mulls Sale or IPO

TRAC Intermodal LLC is exploring a sale or an initial public offering (IPO) after pulling a $485 million bond offering last week, reports WSJ quoting the chief executive Keith Lovetro. Princeton, N.J.-based TRAC, one of the largest leasing companies for trucking equipment, owns about 315,000 intermodal chassis —steel frames with wheels that hook up to truck tractors. TRAC enlisted Morgan Stanley to sell the debt, with $325 million earmarked for a dividend to private equity firm Fortress Investment Group LLC, which bought the company in 2007, earlier this month. However, investor demand was low, forcing TRAC to cancel the sale on March 22. Moody's Investors Service has withdrawn the Caa1 rating for TRAC Intermodal LLC's planned $485 million senior secured second lien notes.

18 Mar 2016

Moody's Lowers 2016 Outlook on Global Shipping

Moody's Investors Service has changed its outlook on the global shipping sector to negative as it expects supply growth to outpace demand growth in 2016 by more than 2 percent, suppressing freight rates, particularly in the dry bulk and containership segments. However, the outlook for the tanker segment remains stable as low crude oil prices will continue to boost demand for tankers. "Even though the tanker segment continues to perform strongly, we expect the supply-demand gap for the industry overall to exceed 2 percent in 2016, and possibly into 2017, as large new vessel deliveries coincide with subdued demand for dry bulk and container ships," Moody's said quoting Marie Fischer-Sabatie, senior vice president in its report.

10 Dec 2015

Moody’s: US ports industry outlook remains stable for 2016

“We expect US container volume to grow 3% to 4% in 2016,” says Moody’s Analyst Moses Kopmar. Moody’s Macroeconomic Board expects the US economy will grow 2% to 3% in in 2015 and 2016, and US container volume typically tracks closely with economic growth. Additionally, shipping costs are near their lowest levels in recent years, a result of both overcapacity in the container market and low fuel costs. “Overcapacity in the container market continues to depress freight rates, as supply growth outpaces demand growth,” Kopmar says. Despite expectations of container volume growth, several factors temper Moody’s outlook. Among them is a significant build-up of business inventories beginning in late 2014 and increasing further in 2015, which boosted container volume growth this year.

08 Dec 2015

Moody's changes outlook on CMA CGM's B1 ratings to stable

Moody's Investors Service has today changed to stable from positive the outlook on CMA CGM S.A.'s B1 corporate family rating, B1-PD probability of default rating and B3 senior unsecured rating. Concurrently, Moody's has affirmed the ratings assigned to the company. This follows CMA CGM's announcement of a pre-conditional voluntary general cash offer to acquire Neptune Orient Lines Limited (NOL, unrated), a Singaporean container liner, for a consideration of $2.4 billion. Temasek Holdings (Private) Limited (Aaa stable), NOL's largest shareholder with a 67% stake, has irrevocably undertaken to tender all of its shares into the offer. "While the affirmation reflects that CMA CGM's potential acquisition of NOL would strengthen its business profile…

10 Oct 2015

Moody Upgrades Port of Palm Beach

The Port of Palm Beach District announced that Moody’s Investors Service, Inc. upgraded the Port of Palm Beach District senior rating to Baa3 from Ba1, and reported the outlook to be stable. The report, released October 2, 2015, documented the port’s strengths, challenges and recent developments as the agency’s rationale for the ratings upgrade. The upgrade to Baa3 recognizes the port’s sustained financial improvement due to successful contract renewals with its largest customers. The improved margins experienced over the last four fiscal years are expected to continue in the midterm, supported by tenant minimum annual revenue guarantee that improve the port’s cash flow predictability.

01 Oct 2015

Moody's Changes Hapag-Lloyd to Positive

Moody’s Investors Service (Moody’s) changed the rating for German Container shipping company Hapag-Lloyd to positive from stable, thanks to cheaper fuel. According to  Moody’s the outlook on the B2 corporate family rating (CFR), the B2-PD probability of default rating (PDR) and the Caa1 senior unsecured rating of Hapag-Lloyd AG. Concurrently, Moody's has affirmed the ratings assigned to the company, including its B2 CFR, B2-PD PDR and Caa1 senior unsecured rating. The change in outlook to positive from stable mainly reflects the company's improved operating performance since the beginning of 2015, driven by the lower bunker fuel price.