Moody's cuts Wan Hai Lines to Baa3

Moody's Investors Service said it downgraded to Baa3 from Baa2 the issuer rating of Wan Hai Lines Ltd. and the bond rating for the senior unsecured bond issued by Wan Hai Lines (Singapore) Pte Ltd., which is guaranteed by Wan Hai.

The outlook is negative.

The downgrade reflects the presence of continued pressure on Wan Hai's profitability, due in turn to lower freight rates, high fuel costs and high charter payments, Moody's said. The drop in freight rates is beyond management and Moody's expectations, and the company's lower profit margin and weakened credit metrics, which will continue for the next two years, no longer support the original Baa2 rating.

The net debt-to-EBITDA ratio was last reported as weak, measuring 5.7x in the first half of 2006, the agency added. Wan Hai will continue to operate in the challenging liner market, especially the highly competitive long-haul markets, and to deal with a high fuel cost environment, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.