[211216.EN.BIZ] Moody's Downgrades Maersk's Credit Rating With a Negative Outlook

MOODY's Investors Service has downgraded Danish shipping giant A P Moller-Maersk's credit rating, putting on pressure on the container shipper as it juggles a major restructuring with a multi-billion dollar acquisition of German rival, Hamburg Sud

Moody's said the downgrade from Baa1 to Baa2 with a negative outlook "reflects Maersk's deteriorating credit profile", according to Reuters.

The credit rating firm put the Danish shipping company under review in September, when it announced a split-up to focus on the shipping business and spin off its energy assets.

"(Maersk's) operations will be less diverse and potentially less protected from a downturn in its end markets," Moody's said in a statement.

Maersk's debt to operating profit ratio - a measure of a company's ability to cover its debt - climbed to 2.5 over the twelve months until the end of September, above Moody's downgrade benchmark of 2.25, the rating agency said.

Last month, Standard & Poor's lowered the company's credit rating to BBB from BBB+ with a negative outlook.

The current ratings from both agencies are still considered investment grade, and Maersk stressed at its capital markets day last week it was committed to maintain that, even if it meant selling assets or cutting dividends.

Maersk agreed this month to buy Hamburg Sud, the world's seventh-largest container shipping line, at an undisclosed price. It's also trying to spin off its oil and gas business, but merger talks with DONG Energy, which has put its North Sea oil and gas assets up for sale, have stalled, sources told Reuters last week.

Source : HKSG.