Standard & Poor’s places CP Ships? ratings on credit watch

Standard & PoorÆs places CP ShipsÆ ratings on credit watch Standard & Poor's places CP Ships' ratings on credit watch
   Standard & Poor's Ratings Services said Monday it has placed its ratings on New Brunswick-based CP Ships Ltd., including the company's 'BBB-' long-term corporate rating, on credit watch 'with developing implications following an announcement by CP Ships that its board of directors has recommended it be acquired by the German travel and shipping company TUI AG.'
   'At this time, it is unclear how the transactions will be structured and what the combined credit quality of the companies will be,' said Kenton Freitag, a credit analyst with Standard & Poor's.
   If the acquisition is successful, CP Ships' senior note, convertible debenture, and bank line agreements all contain change-of-control provisions that could obligate TUI AG to redeem outstanding debt. 'In such an event, it is also possible that the ratings on CP Ships will be withdrawn,' S&P's Ratings Services explained.
   TUI AG is not rated by S&P. The credit watch on CP Ships 'will likely remain in effect until the fourth quarter of 2005, when CP Ships expects the acquisition to be completed,' S&P's Ratings Services said.