Standard & Poor’s Maalot, Israel's leading provider of independent credit ratings, lowered its credit rating for Zim Integrated Shipping Services Ltd. to “CCC” from “B,” saying it expected the company to restructure its large debt with banks in the near term.
Zim owes US$2.69 billion, including US$1.42 billion to the banks, US$875 million to shipyards, and US$391 million to bondholders. The bond debt, issued to investment institutions in 2005-06, is unsecured The Israeli unit of S&P maintained a “negative” outlook for Zim, a subsidiary of conglomerate Israel Corp.
Maalot, which termed Zim’s liquidity as “weak,” said the container line had taken several measures to improve its liquidity that should enable it to meet its debt obligations until the second half of 2014.
"Despite these steps, and the continued weakness in trade conditions in the shipping industry, we believe the company will find it tough to meet its obligations with banks in the second half of 2014," Maalot said.