S&P assigns BBB to Wan Hai notes

Standard & Poor's said it assigned its BBB senior unsecured issue rating to a proposed bond issue of up to $400 million due 2015 by Wan Hai Lines Pte. Ltd.

Proceeds will be used to repay part of the company's outstanding debt and to meet its future capital expenditure.

The rating reflects the company's leading market position in intra-Asia container routes, its low-cost base and satisfactory financial profile, S&P said. However, these strengths are offset by the cyclical nature of the industry and intense competition, which regularly results in downward pressure on freight rates, the agency added.

S&P noted that Wan Hai is expanding its fleet to meet a potential increase in demand.

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