Moody`s rates CMA CGM `stable`, but not out of the woods

MOODY`s Investors Service, after a long silence, has given a fresh credit assessment of troubled Marseilles carrier CMA CGM, assigning it a Ba3 "stable" rating while saying the company remained at risk.

The new rating is the first since June 2009, when, at the carrier`s request, Moody`s withdrew all ratings for CMA CGM, reported Newark`s Journal of Commerce, also noting that since then, the company has undergone a radical restructuring.


But Moody`s said CMA CGM, the world`s third biggest container carrier, was still at risk of default if it failed to secure US$800 million from a bond sale and fully completed financial restructuring.


Moody`s senior credit officer Marco Vetulli said the new rating "reflects the weakness of CMA CGM`s credit metrics despite its high profile. The company`s sizeable capital investment plan limits free cash flow and, as a result, its credit metrics remain weak, constraining the upside potential of the rating in the near term."


The appearance of Turkey`s Yildirim as a major shareholder is CMA CGM`s first major initiative to diversify ownership, but was not enough to fix the problem, said the rating agency. Still, Moody`s expects the French shipping giant to perform "relatively well" 2011.