S&P rates Danaos B+, notes B

S&P said it assigned Danaos Corp. a preliminary B+ rating and a preliminary B rating to its planned $300 million of senior unsecured notes. The recovery rating is 5, indicating a modest (10%-30%; rounded estimate: 10%) recovery in default.

Danaos is raising about $1.2 billion to refinance its capital structure. The new financing package comprises a $815 million four-year senior secured bank facility, up to $300 million seven-year senior unsecured notes and $135 million new lease financing, the agency said.

“Our rating reflects Danaos' competitive position as one of the largest containership owners and long operating track record as a reputable and high-quality tonnage provider,” S&P said in a press release.

The outlook is positive, reflecting the possibility of an upgrade within six to 12 months.

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