Moody’s upgrades Hapag-Lloyd

Moody’s Investors Service said it upgraded the corporate family rating of Hapag-Lloyd AG to Ba3 from B1, its probability of default rating to Ba3-PD from B1-PD and the senior unsecured rating to B2 from B3. The agency changed the outlook to stable from negative.

“Today’s rating action reflects that the negative ratings pressure on the sector and on the company that we anticipated as a consequence of Covid-19 has not materialized. Instead, Hapag-Lloyd’s profitability and credit metrics have continued to strengthen during the first half of 2020, supported by a very strong performance amidst the pandemic by the container shipping industry as well as continued efficiency improvements,” Moody’s said in a press release.

The outlook assumes recent performance improvements in the industry, and the company’s disciplined actions to improve its capital structure will be sustained, leading to Moody’ s-adjusted debt / EBITDA of 2.7x-3.1x and EBIT margin of 6-8% for the next 12-18 months, the agency said.

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