Since the company announced that it was seeking a bond settlement, Maalot has made several downgrades for the bonds
Standard & Poor's affiliate Ma'alot Ltd. cut its bond ratings for Israel Corporation's wholly-owned subsidiary Zim Integrated Shipping Services Ltd. from "B" to "CC", with a "Negative" outlook. Zim raised NIS 1.3 billion in bonds in 2005-06.
The downgrade reflects increased business risk S&P Ma'alot said in a statement. Until a few months ago, Maalot gave Zim's bonds an "A" rating. Since the company announced that it was seeking a bond settlement, Maalot has made several downgrades for the bonds. Maalot added that the latest downgrade might be the last, and that it could go down to "D" for default.
Israel Corp. estimated last week that the troubled carrier will face a cash flow shortage of US$1 billion through 2013 under its proposed restructuring plan. American Shipper reported last week that without all the elements of its restructuring in place, Zim would find it hard to survive.
In a note to the Israeli stock exchange, Israel Corp said it would seek loan extensions from creditors, notably chartering shipowners by offering a stake in the company.