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S&P: CMA CGM lowered, on watch
Standard & Poor's said it lowered its long-term corporate credit rating on CMA CGM SA to B- from B+. The agency said it also lowered its issue ratings on CMA CGM's debt to CCC from B-. The recovery rating on the debt remains 6.
S&P said it also placed all issuer and issue ratings on CreditWatch with negative implications.
The agency said the downgrade reflects CMA CGM's significantly lower than forecasted operating profits in 2011 and the revision of S&P's assessment of the company's liquidity profile to "weak" from "less than adequate". S&P said it believes that CMA CGM's cash flow generation will remain limited, thereby eroding its liquidity position over the coming quarters.
Furthermore, CMA CGM will likely breach its financial covenant tests in 2012 if it cannot take timely corrective actions, the agency said.
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