Standard & Poor unit upgrades Zim bond from 'CC'" to 'B'

STANDARD & POOR's unit Maalot has upgraded Zim's bond rating from "CC" to "B" after the troubled Israeli flag carrier's bailout and a recent rise in freight rates improved cash flow.

The credit rating agency had dropped Zim from an "A" to "CC", a level above bankruptcy when the shipping line faced plunging freight rates and US$3 billion in debt from a swollen order book for new containerships.

But Zim negotiated a $1 billion bailout with shareholders to meet its most insistent creditors, reported American Shipper. Part of Zim's debt was owed to bondholders, but the repayment of that has been rescheduled to allow the business to recover.

"The upgrade is a significant step in stabilisation," said Zim CFO Alon Raveh. "The upgraded "B" is an expression of confidence in Zim's restructuring and strengthens the central message that the debt will be paid in full."

Source: www.schednet.com