NYSE-listed tanker company Navios Maritime Acquisition has seen its outlook changed from stable to negative on the B2 corporate family rating (CFR) reflecting the increased contagion risk facing the company as a result of the challenges that its parent company, Navios Maritime Holdings, is encountering, Moody’s rating agency said.
Moody’s has also changed the company’s outlook on B2-PD probability of default rating (PDR) and B2 rating of the USD 670 million guaranteed senior secured first-lien global notes.
“We have changed the outlook to negative to reflect the rising risk of contagion facing Navios Acquisition from challenges affecting Navios Holdings, its parent company,” said Marie Fischer-Sabatie, a Moody’s Senior Vice President and lead analyst for the issuer.
“The parent company is becoming increasingly financially dependent on its subsidiaries, because weak conditions in the dry bulk market have put pressure on its liquidity and increased the risk of default,” Fischer-Sabatie added.
Furthermore, Moody’s has affirmed all the ratings assigned to the company, recognizing “Navios Acquisition’s continued good performance, which has materially improved the company’s financial profile and firmly positions its credit metrics at B2,” Fischer-Sabatie added.
Navios Holdings’ weak liquidity profile, with very challenging dry bulk market conditions driving continued negative free cash flow generation, and the increased risk of a distressed exchange or default led Moody’s to downgrade the company on April 26. As a result, Navios Holdings is becoming increasingly dependent on the financial flexibility of its subsidiaries, Moody’s said.
Navios Acquisition extended a USD 50 million loan to Navios Holdings in March, which was terminated cancelled in early April, after a lawsuit had been launched by one of Navios Acquisition’s shareholders.
As of 31 December 2015, Navios Acquisition had a fleet of 39 crude oil and product tanker vessels in the water. During 2015, Navios Acquisition generated revenues of USD 313 million and EBITDA of USD 217 million.