Moody's downgrades Global Liman

Moody's Investors Service said it downgraded Global Liman Isletmeleri AS’ corporate family rating to B3 from B2 and the probability of default rating to B3-PD from B2-PD. Concurrently, Moody's downgraded to Caa1 from B2 the rating of the company's $250 million guaranteed senior unsecured bonds due 2021. The outlook is negative. This rating action concludes the review started on Dec. 17.

The downgrade to B3 takes account of deterioration in Global Liman's operating performance as reflected in a reduction in the company's reported EBITDA by 7% in the nine months to September, but more importantly the expectation of limited improvement in earnings this year. This is entirely driven by the weakness in the commercial segment, which is negatively affected by macroeconomic factors and trade tariffs, the agency said.

While cruise operations have improved, Global Liman's metrics are expected to remain below the levels commensurate with the previous B2 rating, namely funds from operations (FFO)/debt of at least 10% and FFO interest cover above 2x, with limited prospects of recovery over the next 12-18 months, and ahead of the company's bond maturity in 2021.

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