Ratings agency Moody’s has upgraded the corporate family rating of Athens-based Capital Product Partners with a stable outlook.
The CFR was revised to B1 from B2 and the probability of default rating to B1-PD from B2-PD.
“Our decision to upgrade CPLP’s rating follows an approximately USD 116 million debt repayment combined with a successful refinancing of its maturities with the new USD 460 million credit facility due 2023 thus extending its debt maturity profile,” Maria Maslovsky, a Moody’s Vice President, Senior Analyst and the lead analyst for CPLP, said.
Moody’s also considered CPLP’s maintenance of moderate leverage and strong coverage for some time despite deteriorating market conditions and expectations of continued stable performance with leverage measured as debt/EBITDA below 4.0x despite weakness in the tanker market.
Tanker segment has been deteriorating in 2017 owing to significant new supply coming in and putting pressure on charter rates, particularly on the crude side. In addition to the excess supply currently pressuring the tanker market, high oil and oil product inventories reduce the demand for tonne-miles. This is a risk because CPLP will need to re-charter its vessels coming up for charter renewal in this weakened market environment, according to Moody’s.