Standard & Poor’s downgrades credit rating on CMA CGM

Standard & Poor’s has lowered its long-term credit rating on CMA CGM to ‘B’ from ‘B+’, and its issue rating on the company’s senior unsecured debt to ‘CCC+’ from ‘B-’.

Standard & Poor’s said in a statement that the downgrade reflects its expectation that CMA CGM will see constrained earnings due to the challenging conditions in the container shipping industry and low freight rates in 2016 and 2017.

The company’s decision is partly due to CMA CGM’s additional fleet expansion and its acquisition, subject to antitrust approvals, of Neptune Orient Lines (NOL) for a total of US$2.4bn, in a partly debt-funded transaction.