MOODY’S DOWNGRADES OUTLOOK FOR MITSUI O.S.K. AND NYK

MOODY’S DOWNGRADES OUTLOOK FOR MITSUI O.S.K. AND NYK    Moody’s Investors Service, the credit rating organization, has changed its rating outlook for Mitsui O.S.K. Lines, Ltd. and Nippon Yusen K.K. from “positive” to “stable,” citing worsening market conditions.
   “The outlook change reflects Moody’s expectation that despite its restructuring initiatives that should help reduce MOL’s costs and improve its balance sheet structure, the deteriorating market conditions across the shipping industry are likely to slow in improving the company’s financial fundamentals in the near to mid term, delaying recovery of its earnings and the improvement in its debtholder protection measurements,” it said, commenting on Mitsui O.S.K. Lines.
   “Despite its restructuring initiatives that should help reduce NYK’s costs and improve its balance sheet structure, the deteriorating market conditions across the shipping industry are likely to slow in improving the company’s financial fundamentals in the near to mid term,” Moody’s said in its statement on NYK.
   In similar statements about each Japanese shipping group, Moody’s said that it believes that the deteriorating shipping market conditions evident in 2001 represent a broader industry downcycle.
   “Additional fleet tonnage being delivered (not matched by scrapping) and significant developments in the world economy beyond the industry’s control are uncertainties” facing the MOL, NYK and the industry at large, it said.
   “The total amount of U.S. and European imports are likely to be negatively impacted as the respective economies slow down,” Moody’s added.
   However, the credit rating firm said that MOL and NYK are active in container liners, tramp ships and oil/liquefied natural gas tankers, helping them stabilize earnings during periods of market softness.