CMA CGM responds on S&P rating

CMA CGM responds on S&P rating French ocean carrier CMA CGM said Monday that credit rating agency Standard & Poor’s decision to place the line on its CreditWatch didn’t represent the poor performance of CMA CGM so much as it reflected the struggles of the shipping industry as a whole.
   “CMA CGM is one of the very few companies to be rated by agencies like Standard and Poor's, and the only one amongst the first five in the container shipping industry,” the carrier said in a statement e-mailed to American Shipper. “Therefore, as a benchmark of this industry, the group is suffering from repeated detrimental actions which reflect more the state of the industry and not the financial situation of the company. The elements CMA CGM group will provide within two weeks will demonstrate the financial strength of the company.”
   In putting CMA CGM on its CreditWatch program, S&P acknowledged that the carrier is one of the most efficient in the industry and that the rating reflected the struggles of the industry as a whole. The implication was not necessarily that CMA CGM was underperforming in relation to its competitors, but that the weakness of the entire industry was affecting its creditworthiness.
   That CMA CGM is the only major container carrier to be tracked by S&P and other ratings agencies is likely due to a $253 million bond sale it issued in 2006 to finance a fleet expansion of 12 ships through a ship owing vehicle called Vega Container Vessel.
   With no other carriers with which to compare against CMA CGM, the French line has taken the brunt of the shipping industry’s poor performance as a whole. But the carrier said it has performed well in relation to its competitors and that the results it will announce shortly reflect that.