The coronavirus outbreak is threatening to scupper a debt refinancing for the world’s third-largest container shipping company.
France’s CMA CGM SA is aiming to start refinancing its debt pile by the end of next month. The Marseille-based company, one of the biggest maritime carriers out of China, is seeking to extend about $400 million of loans and is also in talks with creditors to refinance about 725 million euros ($784 million) of bonds due in January.....MORE
“I don’t see a bond refinancing in the near term,” said Jan Patteyn, a credit analyst at Octo Finances in Paris. “The coronavirus adds uncertainty to the sector and should weigh on CMA’s first quarter results.”
The consequences could potentially be severe for CMA CGM, which has been present in Shanghai since 1992 and moves one out of eight containers from Asia to Europe and the U.S. The virus could finally trip up the company, which has used debt to fuel growth in recent years. It has about $18 billion of debt in total.
The shipper’s bonds maturing in January 2021 have slumped about 10 cents on the euro over the past month to 89 cents, pushing up the yield. That implies the company would have to pay interest in excess of 20% on a new debt sale.
A CMA CGM spokesman said the company will provide details on its plans when it publishes its financial results in early March....
