S&P: Hapag-Lloyd to negative

Standard & Poor's said it revised the outlook on Hapag-Lloyd Holding AG to negative from stable.

The agency also said it affirmed the BB- long-term issuer credit rating and the B issue rating on the €480 million senior unsecured notes due 2015 and the $250 million senior unsecured notes due 2017 issued by Hapag-Lloyd AG.

The recovery rating is unchanged at 6, indicating 0% to 10% expected recovery in a default.

The outlook revision reflects Hapag-Lloyd's significantly lower profitability in the first half of this year than previously anticipated, S&P said.

Given the persisting difficult industry conditions, the agency said it believes the company's cash flow protection measures may now fall short of the levels viewed as commensurate with the rating, the agency said.

The company's profitability came under pressure because of the significant rise in bunker costs, up 23% year on year, which it could only partly counterbalance by hedging contracts, S&P said.

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