Shipping Giant CMA CGM Sells Bond to Refinance Debt

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October 12, 2020

The LNG-powered CMA CGM Jacques Saadé under construction. Photo courtesy CMA CGM

By Irene García Pérez and Libby Cherry (Bloomberg) –French shipping giant CMA CGM SA has found a window of opportunity to refinance its debt due in January.

The company, which is the world’s fourth-largest container shipping company, is selling 525 million-euros ($619.3 million) of senior unsecured notes due 2026. The proceeds will be used to redeem, together with available cash, all of its outstanding 7.75% senior notes due in January, according to an emailed statement. The new notes will rank pari passu in right of payment to all the firm’s existing and future senior indebtedness.

BNP Paribas SA and HSBC Holdings Plc are global coordinators of the offering. Virtual roadshow will start on Tuesday, and pricing is expected toward the end of the week, a spokeswoman for the company added by email.

CMA CGM had discussed with investors its intentions to begin refinancing its debt pile by March, but the outbreak of coronavirus scuppered its plans. The company’s bonds slumped, but recovered strongly in May, when it secured a 1.05 billion euro loan 70% backed by the French state.

The company had an adjusted net debt of about $17.1 billion as of June 30, according to its second quarter earnings statement, the most recent available.

Moody’s changed the outlook for the company to positive on Monday, on the grounds that it had increased its liquidity by around one billion dollars since the end of last year. That level looks likely to remain or even improve based on the 2021 forecast for the shipping industry, the statement said.

The French shipping giant said in September that the recovery in container shipping seen since April should continue during the third quarter for most routes.

“Strong momentum of the shipping market, driven by both volumes and freight rates, should allow the group to further significantly improve its operating margin compared with the second quarter,” it said.

© 2020 Bloomberg L.P.

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