14 November 2011 22:53 [Source: ICIS news]
HOUSTON (ICIS)--New environmental standards may further damage the already weak credit quality of some global shipping companies, a US credit rating firm said on Monday.
Shipping companies face new standards for sulphur emissions and ballast water treatment beginning in 2012 from international and US regulatory agencies.
“We think this could have negative implications for our ratings on shipping companies, especially for those at the lower end of speculative grade [B+ or lower] or with limited financial flexibility,” ratings firm Standard & Poor’s (S&P) said.
The firm said shipping companies must invest millions of dollars to retrofit vessels with approved water ballast systems – which stabilise a vessel at sea and compensate for weight lost because of fuel and water consumption – or exhaust scrubbers. Otherwise, they face large fines.
“Those with poor credit quality may also find less-friendly capital markets that could raise their cost of financing, [causing] further damage their already weak credit quality, [leading] us to take a negative rating action,” the firm said.
Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy
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