Moody’s Downgrades Maersk Ratings, Outlook Negative

Image Courtesy: Maersk Line

The issuer rating and senior unsecured rating of Danish shipping and oil giant A.P. Møller-Mærsk A/S have been downgraded to Baa2 from Baa1, according to Moody’s ratings agency.

Moody’s also downgraded Maersk’s medium-term note (MTN) program rating to (P)Baa2 from (P)Baa1. All ratings were placed on negative outlook.

“The downgrade reflects our expectation of reduced diversification following the results of the strategic review, as well as the deterioration in Maersk’s credit profile amidst weak market conditions particularly in container shipping and drilling, which we do not anticipate to be reversed shortly,” Maria Maslovsky, Moody’s Vice President — Senior Analyst and the lead analyst for Maersk, said.

“In addition, significant uncertainties associated with the execution of the strategy of separating the energy businesses, especially the final capital structure of the transportation and logistics business, are encapsulated in the negative outlook,” Maslovsky added.

Namely, the conglomerate expects to focus on its transportation and logistics division incorporating Maersk Line, the global leader in container shipping which will grow with the Hamburg Sud acquisition, APM Terminals, a top five terminal operator, Damco, a logistics provider with a growth potential, as well as Svitzer and Maersk Container Industry.

While Moody’s acknowledges the strong position and growth potential of the transportation and logistics business, the ratings agency also recognizes that with the separation of the energy division the company’s operations “will be less diverse and potentially less protected from a downturn in its end markets.”

“Given the negative outlook and the future focus on the cyclical shipping industry, an upgrade is unlikely at this stage,” Moody’s said, adding that it would consider stabilizing the rating outlook once the uncertainty associated with the separation of the energy businesses is reduced such that a standalone credit profile for the transportation and logistics division can be reasonably evaluated.

Share this article

Follow World Maritime News

In Depth>

Events>

<< Aug 2017 >>
MTWTFSS
31 1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30 31 1 2 3

Shipping2030 Asia

This year Shipping2030 Asia will take place with Global Liner Shipping conference, offering attendees unique access to networking with the container shipping industry…

read more >

Indonesia Marine & Offshore Expo (IMOX) 2017

Indonesia Marine & Offshore Expo (IMOX) 2017, Batamis an international maritime and offshore industrial event that brings an international…

read more >

Salvage & Wreck Asia

Could your business be affected by shipwreck? Are you a salvage professional or a wreck removal expert? …

read more >

DSM17

Donsö Shipping Meet 2017 is an all inclusive exhibition. Meals, electricity, meeting schedule and banquette dinner is included…

read more >