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