S&P rates Pacific International Lines BBB

Standard & Poor's said it assigned a BBB corporate credit rating to Singapore-based Pacific International Lines Pte. Ltd. The outlook is stable.

S&P said the rating is supported by the company's prominent market position in its key trade routes, which connect Asian markets to relatively atypical destinations in the Persian Gulf, Red Sea and Africa; relatively higher level of market and business diversity; cost control and improving operating efficiencies; and an overall moderate financial profile, as reflected by an average lease-adjusted EBITDA interest cover of 6.8x and lease-adjusted funds from operations to net debt of 45% for the past five years.

These strengths are partly offset by the company's increasing investments in volatile long-haul routes; comparatively lower operating profitability attributable to the highly competitive container manufacturing business and the cost of servicing markets in the Persian Gulf, Red Sea and Africa; moderately higher dependence on charter markets; and the cyclical nature of container shipping industry, the agency said.

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