Britain To Build A ‘National Flagship’ To Promote Maritime Trade
by Alistair Smout (Reuters) – Britain is to build a new flagship to promote its business and trade interests around the world, the government said on Saturday, in a move it...
(Dow Jones) Already burdened with eroding credit quality, many U.S. shipping companies will face greater challenges in the near future as their older fleets continue to age, Standard & Poor’s said.
“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 S&P analyst Funmi Afonja. “Companies that cannot find sufficient financing to refresh their fleet may not survive.”
For those operators that can stay afloat, she said, reduced capacity should cut back on industry oversupply, leading to better charter rates.
The inland river system and the coastwise trade benefit from government protections that exclude competition from foreign-flagged vessels. But, S&P said, U.S.-built ships are expensive, and shipping companies’ access to financing depend heavily on their credit quality.
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, S&P said.
Companies at the lower end of the speculative-grade ratings spectrum are both the most likely to face steep financing costs and the least equipped to deal with those costs, S&P continued.
-By Ben Fox Rubin, Dow Jones Newswires
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