S&P downgrades CMA CGM

Credit ratings agency Standard & Poor’s (S&P) downgraded container shipping operator CMA CGM to ‘B’ from ‘B+’.

Further, S&P lowered the rating on the company’s senior unsecured debt to ‘CCC+’ from ‘B-’.

S&P expects CMA CGM to witness a period of constrained earnings due to the challenging conditions in the container shipping industry and low freight rates in 2016 and 2017.

S&P added that it would further lower the rating in the next few quarters if it believed the carrier was experiencing a larger fall in freight rates than expected.

The company had previously stated that container liners were experiencing severe freight-rate volatility and downward pressure on primary and secondary routes, which it expected to continue in the next 12-18 months.

Source: Container Mag

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