Moody’s: Teekay Corporation’s Outlook Raised to Stable

Image Courtesy: Teekay

Moody’s rating agency has upgraded the ratings outlook for Bermuda-based shipping company Teekay Corporation from under review to stable.

The ratings agency also confirmed the ratings of Teekay Corporation’s Corporate Family Rating (“CFR”) at B3 and senior unsecured debt rating at Caa1.

Furthermore, Moody’s upgraded the Speculative Grade Liquidity rating to SGL-3 (adequate), from SGL-4 (weak).

The changes are related to the company’s adequate liquidity, following the execution of refinancing initiatives as of June 29, 2016.

The refinancing resolved the 2016 refinancing risks of some USD 250 million and improved the company’s liquidity position over the near term, via increased access to its equity margin revolver due 2018 and a USD 100 million equity raise, the ratings agency said.

Moody’s anticipates that continued weakness in the underlying energy markets will likely lead to profit margin pressures and continue to weigh on the MLPs’ ability to upstream cash to the parent amidst reducing revolvers, project funding needs and liquidity requirements.

The stable outlook reflects Moody’s expectation that, although end markets will remain weak over the intermediate term, Teekay will maintain adequate liquidity over the next year to cover its G&A expenses and debt obligations.

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