Yesterday the pair sealed their long-awaited merger to create a Hamburg headquartered company controlling 200 vessels with a combined annual turnover of around EUR 9bn ($12.4bn).
However Moody’s believes the unified company will still be highly leveraged and has retained its B2 corporate family rating (CFR) on Hapag-Lloyd as well as a B2-PD probability of default rating (PDR) and a Caa1 senior unsecured rating, all of which it deems negative.
"Moody's recognises that the combination would create the fourth-largest container shipping player in the world, as well as strengthen the company's Latin American operations and bring with it significant cost synergies," Marie Fischer-Sabatie, Moody's lead analyst for Hapag-Lloyd, said in a research note.
"That said, the combined entity would initially have a high leverage, which we estimate at around 7x in the first year following the merger."
Moody’s notes that the combination entails some integration risks with CSAV still in the midst of its own wide scale restructuring.
However it points out that Hapag-Lloyd outperformed initially targeted synergies when it successfully took over CP Ships eight years ago.
