Moody's upgrades DP World after re-rating CMA CGM as stable

MOODY's has upgraded the credit rating of DP World to investment grade, citing its "rapid recovery" in the terminal operator's performance.

Moody's Investors Service increased the Dubai firm's US$3.25 billion of long-term debt to Baa3 from Ba1, saying its outlook is stable.

The new ratings "are sustained by the company's diversified global operations, the expected growth in international container traffic as well as solid profitability and a strong liquidity profile," according to Moody's associate analyst Franck Nowak in Dubai.

DP World should "remain within the boundaries of its leverage target by avoiding large acquisitions, and gradually improving cash generation," he said, reported Newark's Journal of Commerce. DP World boosted 2010 earnings 35 per cent from a year ago to $450 million from $333 million on a nine per cent increase in revenue to $3.2 billion as volume at its 28 consolidated terminals rose nine per cent to 27.8 million TEU.

Recently the rating agency, after a long silence, gave a fresh assessment to troubled Marseilles carrier CMA CGM, assigning it a Ba3 "stable" rating while saying the company was still at risk.

The new rating of the French carrier is the first since June 2009, when, at the shipping line's request, Moody's withdrew all ratings for CMA CGM, noting that since then, the company has undergone a radical restructuring.

But Moody's said CMA CGM, the world's third biggest container carrier, was still at risk of default if it failed to secure US$800 million from a bond sale and fully completed financial restructuring.
(Source:http://www.schednet.com)