S&P ups, rates Hapag-Lloyd notes BB

S&P said it upgraded Hapag-Lloyd AG and its senior unsecured debt to BB from BB- and B, respectively, and assigned a BB rating to its planned €300 million senior unsecured notes due 2028. The agency also revised the debt’s recovery rating to 3 from 6 and assigned a 3 rating to the notes.

“Hapag-Lloyd achieved stronger-than-expected EBITDA in 2020, and we expect it to outperform our October 2020 base-case in the current year. Strong free operating cash flow (FOCF) generation allowed Hapag-Lloyd to reduce its adjusted debt and increase its financial headroom, and we expect it to sustain these improvements. This should help to mitigate the likely lower EBITDA from 2022 as freight rates moderate or unforeseen operational setbacks,” S&P said in a press release.

The outlook is stable.

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