Tuesday, January 26, 2021
Hawai'i Free Press

Current Articles | Archives

Sunday, April 1, 2012
S&P: Credit Risks Mount For U.S. Domestic Shipping Companies As Ships Start Showing Their Age
By News Release @ 10:55 PM :: 7132 Views :: National News, Jones Act

S&P: Credit Risks Mount For U.S. Domestic Shipping Companies As Ships Start Showing Their Age

News Release from Standard and Poors, March 26, 2012

The U.S. domestic shipping industry's fleet is aging, Standard & Poor's Ratings Services said in an article titled "Credit Risks Mount For U.S. Domestic Shipping Companies As Ships Start Showing Their Age," published earlier today on RatingsDirect.

More than a thousand ships and barges will reach the end of their useful lives in the next few years. More may be forced out of service as environmental standards tighten. But given the eroding credit quality of many carriers, replacing vessels may prove difficult, or at least costly, for shipping companies.

"The U.S. domestic fleet likely will contract over the next three to five years as vessels retire faster than owners can replace them," said Standard & Poor's credit analyst Funmi Afonja. "Companies that cannot find sufficient financing to refresh their fleet may not survive. For operators that do, the reduced capacity should cut back on industry oversupply and support better charter rates."

The inland river system and the coastwise trade benefit from protections in the Jones Act that exclude competition from foreign-flagged vessels. However, U.S.-built ships are expensive. And shipping companies' access to financing and cost of capital depend heavily on their credit quality and capital market conditions.

"Those with satisfactory credit quality can seek help from government-backed financing programs," Ms. Afonja said. "But fewer companies can meet those programs' credit standards."

"Ultimately, how quickly U.S. domestic shipping companies are able to replace retired vessels and how they finance fleet replacement will be the keys to their well-being," she added.

Weak credit quality, challenging capital market conditions, and reduced access to government-guaranteed loans likely will increase the cost of funding new vessels and retrofitting old ones to meet upcoming environmental regulations.

Companies at the lower end of the speculative-grade spectrum--particularly those we rate in the 'B' category or below)--are both the most likely to face steep financing costs and the least equipped to deal with these high costs.

The report is available to subscribers of RatingsDirect on the Global Credit Portal at www.globalcreditportal.com. If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-7280 or sending an e-mail to research_request@standardandpoors.com. Ratings information can also be found on Standard & Poor's public Web site by using the Ratings search box located in the left column at www.standardandpoors.com.

---30---

S&P: Credit Risks Mount For U.S. Domestic Shipping Companies As Ships Start Showing Their Age (subscription required)

As Predicted: US-Build requirement for ships: Dilemma for Hawaii, Guam, Alaska, and Puerto Rico

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

808 Silent Majority

ACA Signups Hawaii

ALEC

Alliance Defending Freedom

Aloha Pregnancy Care Center

American Council of Trustees and Alumni

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Astronomy Hawaii

Ballotpedia Hawaii

Better Hawaii

Blaisdell Memorial Project

Broken Trust

Build More Hawaiian Homes Working Group

ChinaTownWatch.com

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

Coffee Break

DeedySupport.com

DVids Hawaii

E Hana Kakou Kelii Akina

FIRE

Fix Oahu!

Follow the Money Hawaii

Frank in Hawaii

Front Page Magazine

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Habele.org

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii Coalition Against Legalized Gambling

Hawaii ConCon Info

Hawaii Credit Union Watch

Hawaii Crop Improvement Association

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Advocates

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii Future Project

Hawaii Gathering of Eagles

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii March for Life

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

Heritage Foundation

HIEC.Coop

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Navy League

Honolulu Traffic

House Minority Blog

I Vote Hawaii

If Hawaii News

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

Iowa Meets Maui

Jackson v Abercrombie

Jihad Watch

July 4 in Hawaii

Kahle v New Hope

Kakaako Cares

Kau TEA Party

Kauai Co GOP

Keep Hawaii's Heroes

KeyWiki

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Malulani Foundation

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

Mauna Kea Recreational Users Group

MentalIllnessPolicy.org

Middle East Forum--The Legal Project

Mililani Conservatives for Change

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

Muslim Brotherhood in America

NAMI Hawaii

NARTH

Natatorium.org

National Christian Foundation Hawaii

National Parents Org Hawaii

National Wind Watch

New Hawaiian

New Zeal

NFIB Hawaii News

No GMO Means No Aloha

Northwest Economic Policy Seminar

Not Dead Yet, Hawaii

Now What I Really Think

NRA-ILA Hawaii

Oahu Alternative Transport

ObamaCare Abortion Hawaii

Obookiah

OHA Lies

Opt Out Today

OurFutureHawaii.com

Pacific Aviation Museum

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Pritchett Cartoons

Pro-GMO Hawaii

P.U.E.O.

RailRipoff.com

Rental by Owner Awareness Assn

Republican Party -- Hawaii State

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

Save Dillingham Airfield

School Choice in Hawaii

SenatorFong.com

Sink the Jones Act

Statehood for Guam

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

UCC Truths

US Tax Foundation Hawaii Info

VAREP Honolulu

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

Yes2TMT